Against the greenback the euro rose by 0

European stock markets have been a consolidation session which the scale was accentuated by the bad direction of Wall Street (see box below). CAC 40 (see page 17) index thus assigned 1.10, to 5.302,99 points, while the Futsee index dropped 1.03, to 6.108,60 points, and the DAX 30 index going 1.15, to 6.115,10 points. Against the greenback, the euro rose by 0.31, to 1,2558 dollar.

Bond markets registered an increase. The performance of the OAT to 10 years in reference is folded 3 basis points, to 3,824, a decline of 2 basis, 3.65, the rate to 2 French years. Government bonds benefited from a series of statistics such as, for example, the fall of the ZEW index, which measures the confidence of German investors, who fell to its lowest level for more than thirteen years. In addition, annual inflation in the euro area has been reduced to 1.7 in September, after 2.3 in August, reaching its lowest level since March 2004, according to the second estimate from the Eurostat European statistics office. In its first estimate, the Institute had suggested a figure of 1.8.

Inflation returns therefore temporarily below the 2 target set by the European Central Bank (ECB). Only, it is the sustainable nature of this decline could potentially persuade the Institute of broadcast to waive its next interest rate increase. What seems to be the case given the care with which the ECB carefully prepares minds to a new increase of 0.25 of its main interest rate to 3.50 in December. Indeed, rather in the direction of the diagnosis of the ECB, industrial production in the euro area jumped 1.8 in the month of August and 5.4 over a year, according to the data corrected for seasonal variations of Eurostat. The production had declined by 0.4 in July after staying stable in June. "It has become unlikely that the conjunction between the budgetary shock and the delayed impact of the tightening of monetary conditions would be sufficient to restore growth in the euro area to its potential rate in early 2007." "To ensure a return to non-inflationary growth, the ECB considers is obliged to back more its rates", noted HSBC France strategists.

Status quo in the Canada

In the US, bond markets have first marked the kick after the announcement of an increase of 0.6 of the base (excluding energy and food) price index production in September analysts expected that an increase of 0.2. The General index fell by 1.3 while the consensus was a decline of 0.7. Interest rates then left clearly downward after the Federal Reserve announced a decline of 0.6 of industrial production in September it had remained stable in August and analysts foresaw that a decrease of 0.1 in September. The Fed revised figures for August to highlight a stability of production instead of a decrease of 0.1 as announced previously. Balance: the performance of the US Treasury 10-year loan to farmer, from 4.77 to 4,738 for a decline of 5 basis points to 4,802, the rate to 2 years.

For its part, the Bank of the Canada has as expected announced yesterday that she stood unchanged at 4.25 interest rates, in effect holding that the risks surrounding its projection for inflation were "relatively balanced."