(BFM Bourse) – Weighed down by the lack of progress on the diplomatic front between Ukraine and Russia, the Paris market returned 2.8% this Wednesday, the day after the 10th biggest increase in its history (+7, 13%). The ECB’s decision to accelerate the pace of reduction in its asset purchases also weighed on the trend.
Slightly down at midday after having signed an exceptional rebound (+7.13%) the day before against a backdrop of first encouraging signals towards peace between Russia and Ukraine, the Paris market accentuated its decline in early afternoon, taken aback by the ECB’s less accommodating than expected bias in a context of uncertainty and inflation. Still very volatile, capable for example of recovering 1.4% in 5 minutes shortly before 4 p.m., the tricolor market barometer ends the session on a drop of 2.83% to 6,207.20 points.
“To almost everyone’s surprise, the ECB has decided to accelerate the exit from its asset purchase programme. A rate hike at the end of the year has therefore again become possible. And this is a We can’t imagine what his decision would have been if the geopolitical risk weren’t so high,” comments Ronan Blanc, manager at Financière Arbevel. “But like all compromises, this one risks not satisfying anyone,” he adds, believing that “the ECB is no longer master of time.” In a very uncertain context in terms of growth, this decision to terminate the APP [l’un des deux programmes de rachats d’actifs de la BCE avec le PEPP, NDLR] in the 3rd quarter is incomprehensible” judge for his part severely Franck Dixmier, director of bond investments at AllianzGI. The institution is indeed according to him “de facto prisoner of a rigid” forward guidance “… while we expected on the contrary, a flexible approach” he regrets. If the ECB decided on Thursday to accelerate the gradual withdrawal of its asset purchases, it does however allow itself – as expected – time to act on rates.
Record inflation in the United States
Across the Atlantic, the Bureau of Labor Statistics for its part unveiled a new inflation record for forty years, with an acceleration in consumer prices of 7.9% over one year according to the CPI index. Even if this figure comes out in line with economists’ expectations, they are now counting on a further acceleration of inflation in the second quarter in view of the soaring prices of raw materials in the context of the war in Ukraine. These data will also feed the discussions of Fed officials, who meet next week (March 15 and 16). At this stage, the markets are 95% expecting a 25 basis point hike in Fed rates this month, but some experts are no longer ruling out a more abrupt rise. “If the ECB has been less accommodating than expected despite the situation in Ukraine…then the Fed in a few days could be downright ‘hawkish’,” imagines Alexandre Baradez, head of market analysis at IG. After Christine Lagarde’s press conference and the new data on inflation, “Fed Funds Futures”, which reflect expectations of rate hikes, have also rebounded significantly, with investors now betting on nearly 7 rate hikes. rates (+175 basis points) in 2022 from the Fed, against less than 5 increases at the beginning of the month.
Global markets also suffered on Thursday from the failure of new talks between Ukraine and Russia, the two camps gathered in southern Turkey having failed to agree on a ceasefire. in Ukraine.
Vivendi in good shape
Within the CAC 40, Vivendi (+1.5%) dominates the meager pack of increases, following the publication of its copious 2021 results, marked by an Ebitda more than doubled in one year. Outside the flagship index, the results of Verimatrix (+3.5%), Tikehau (+12.1%), GL Events (+2.9%) and Jacquet Metals (+2.5%) are also well received – unlike those of Maisons du Monde, whose share price fell in the afternoon (-3.1%).
Biotech Abivax (+10.9%) benefits from encouraging results from a one-year follow-up study of patients with rheumatoid arthritis treated with its molecule ABX464 while Navya accelerates by 14.5% with an agreement to deploy on a large scale its solution of autonomous shuttles in Saudi Arabia. For its part, SES Imagotag jumped 14.6%, thanks to an expansion of its partnership with Walmart, which supports the objective of reaching 800 million euros in turnover by 2023.
On the other hand, the publications of JCDecaux (-2.9%) and Haulotte (-5.3%) do not pass well with investors, without there being however a big gap vis-à-vis market expectations.
Again moving inversely to stock prices, oil prices rebounded slightly after the considerable fall the previous day. The contract on a barrel of Brent for May delivery picked up 1.1% to 112.3 dollars around 5:55 p.m., while that on WTI (next April expiry in this case) gleaned 0.6% to 109.6 dollars.
On the foreign exchange market, the euro retreated by 0.62% but narrowly preserved the threshold of 1.10 dollars.
Quentin Soubranne – ©2022 BFM Bourse