(BFM Bourse) – Central banks dictate the trend. It rises strongly the day before, reassured by the ECB’s action on the differential in sovereign rates between the member countries of the zone euro, the Paris Stock Exchange lost more than 2% at noon. The US Federal Reserve made a historic rate hike on Wednesday night, a tightening of its monetary policy that has the effect of causing tensions in the bond market.
For fans of central bank meetings, it’s served. Galloping inflation has pulled the different fundraisers of the planet out of the forest, strongly requested by the markets to intervene to put out the fire. In the night, the Central Bank of Brazil raised its rates for the eleventh consecutive time. Banque auriverde was followed a few hours later by the Swiss National Bank, which had just withdrawn its reserves at the start of its monetary tightening cycle. It proceeded, for the first time in 15 years, to a monetary turn of the screw by lowering its reference rate from -0.75% to -0.25%. Other increases are on the agenda to try to control inflation at its peak.
The Bank of England’s response to inflation will be released at 1:00 pm as the country is also plagued by runaway prices. It is expected to raise rates for the fifth time in a row. On Wednesday, the Fed formalized a 0.75 percentage point increase in its key rate, following May’s 0.50 point hike, the highest since 1994. Jerome Powell indicated such an increase is unlikely to be replicated, while arguing that the July meeting would result in an increase of 0.5 or 0.75 percentage points depending on the economic climate in the United States.
A little earlier, it was the turn of the European Central Bank to give answers to the markets in their fight against inflation and the yield differential between German bonds and the most fragile countries in the area in the image of Italy. The week of the central bankers will end on Friday with the decision of the Bank of Japan that follows a monetary policy diametrically opposed to that in force in the other countries of the world.
the ACC 40 which had gained 1.35% on Wednesday, reassured by the ECB’s performance, fell 2% to 5,904.91 points after falling to 5,884.43 points. The star index of Paris raises its annual losses to more than 17%.
The tightening of monetary policies is once again fueling tensions in the bond market. The US 10-year Treasury bond hit a high of 3.44%, while its European counterparts were not far behind: the German Bund of the same maturity rose to 1.80%, as did the French 10-year bond which contracted to 2.38%.
Euroapi at the head of the provisional CAC 41
Across the Paris Stock Exchange, Engie loses nearly 8% as the group announces it has seen a drop in gas deliveries after restrictions on Russian blue gold.
Rexel, which could integrate the index ACC 40 I finish it, considers that it is in a position to accelerate in terms of profitable growth in the period 2022-2025, starting with an increase in its objectives for this year. The electrical equipment distributor, on the other hand, yields 2.7%.
Atos continues with its black series and still yields almost 7% in the wake of the forthcoming departure of its managing director and the plan to split the company into two independent publicly traded entities. Since the beginning of the year, it has sunk by more than 66%.
On the small-cap side, Xilam Animation returns 2% while Marc du Pontavice’s studio has been selected by Disney+ to supply two new exclusive animated series.
The price of oil continues to fall to 117.50 dollars a barrel Brent (-0.87%) and at $114.85 for the WTI, yielding to fears of a slowdown in demand in a context of recession. The single currency lost ground at 1.04 dollars, penalized by the rise in the dollar after the Fed’s announcements about its key rate policy.
Sabrina Sadgui – ©2022 BFM Bourse