European stocks rise after US inflation data

European stock markets rounded off increases together with futures on Wall Street after American inflation in August proved to be in line with expectations, growing year-on-year by 3.4% in the main data and 2.4% in the 'core' data, net of the cost of food and energy goods. Milan gains 1.1%, London and Paris 0.8%, Frankfurt 0.7% while futures on the Nasdaq advance by 0.8% and the S&P 500 by 0.7%.

The performance of bonds is divergent: the slightly above-expected month-on-month growth of the 'core' part (+0.3% compared to the +0.2% expected) has prompted bets on a rate increase by the Fed at next week's meeting, which the market is now discounting at 90%, pricing in two rate increases within the year. The yields on two-year bonds are thus rising slightly (+1 basis point to 4.6% for two-year Treasuries) while those on longer-term maturities are falling (-2 basis points to 4.94% for 10-year bonds). Ten-year BTPs also fell slightly, dropping two basis points to 4.362%, while the spread with the Bund dropped two basis points to 86 basis points.