(CercleFinance.com) – The Paris Stock Exchange ends the week in the red: the CAC40, which dropped almost -1% at the end of the session towards 7,045, displays a stable score over the past 5 sessions… but a few minutes earlier, it was -0.5% (with a low of 7,006 points) just after the publication of American consumer confidence.
Wall Street reacted less badly since the US indices advanced by +0.6% on average.
Confidence which deteriorated for the fourth consecutive month, from 63.8 to 60.4 in November, according to the monthly survey from the University of Michigan.
Joanne Hsu, the author of the report, discusses concerns surrounding the consequences of rising interest rates, but also the effect of the conflicts in Gaza and Ukraine.
The component of households’ judgment of their current situation thus fell to 65.7 compared to 70.6 last month, while the sub-index measuring their expectations fell to 56.9 after 59.3 in September.
The recent revival of market optimism has not resisted the negative effect of the cautious comments made by several Fed officials over the last 48 hours.
Investors were taken by surprise yesterday by Jerome Powell who explicitly questioned the effectiveness of the measures taken to bring inflation back towards its 2% objective.
In the wake of these comments, the estimated probability of a new tightening by the FED in December has risen to almost 15%, compared to less than 5% a week ago, according to the CME Group’s FedWatch barometer.
Christine Lagarde in turn indicated this afternoon that we will have to wait ‘several quarters’ before considering a relaxation of the ECB’s monetary policy.
To reassure himself a little, Mr Villeroy de Galhau, the governor of the BdF, believes that ‘barring an unexpected shock to inflation, the ECB’s rate increases are over’.
The market is also worried by the surge in rates following the semi-failure of a $24 billion issue of ’30-year’ Treasury bonds on Thursday evening, which resulted in strong tension in bond yields. Ten-year Treasuries, which rose to 4.64% against 4.49% the day before.
Specialists in Treasury securities (SVT) having been obliged to compensate for the weak demand from foreign institutions for the ’30 years’.
The tension eases a little this afternoon on the T-Bonds which erase -4 Points to 4.5920.
On the other hand, our OATs and Bunds are increasing by an additional +5 points to 3.29% and 2.7050%, BTPs are also showing +5 points to 4.566%.
Following several sessions that were already very calm in terms of statistics, few indicators appeared on the program for this last session of the week.
In Europe, the morning was mainly animated by the publication of the first estimate of the United Kingdom’s GDP for the third quarter.
UK industrial production stagnated in September compared to the previous month, following a decline of 0.5% in August (revised from a 0.7% decrease initially announced), according to the Office for National Statistics.
After the frenzy of publications of the last sessions, the calendar was also lightened today on the side of corporate results: Allianz reveals a fall of -29.5% in profits) and Richemont sees its profits rise to €1.5 billion.
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