(CercleFinance.com) – On the eve of a so-called ‘4 witches’ day, the Paris Stock Exchange concluded the session with a gain of 1.19%, at 7,308 points, notably driven by Alstom (+4.6%) , Bouygues (+2.5%) or even URW (+2.4%).
While the ECB announced a 10th rate increase, to 4%, investors seem to have been reassured by the very transparent communication from the bank which suggested that this could well be the last tightening.
Christine Lagarde thus insisted at a press conference that the current rates were intended to be maintained until inflation convincingly approaches the 2% objective (objective which could be reached at the beginning of 2026).
The Central Bank took advantage of this meeting to update its forecasts. Thus, ‘given the increasing impact of monetary tightening on domestic demand and the slowdown in international trade’, it significantly reduced its economic growth projections to 0.7% in 2023, 1% in 2024 and 1.5 % in 2025.
Furthermore, inflation is revised upwards in 2023 and 2024 to respectively 5.6% (compared to 5.3% previously) and 3.2% (compared to +3% previously), but downwards for 2025, to 2.1%.
In ‘core’ data (excluding energy) inflation is revised slightly downwards, to 5.1% on average in 2023, 2.9% in 2024 and 2.2% in 2025.
Christine Lagarde notes that activity in ‘services’ is falling significantly, that banks are lending less easily, that companies are less demanding (decrease of -3% over 1 year compared to -2.2% at the end of the first half) , that loans to individuals are declining (by -1.7% since January 1, by -0.8% over June/July/August).
The ‘M3’ money supply (including credit) contracts by -0.5% this year, given food inflation which remains above 6%.
Highly anticipated data in the United States, retail sales increased by +0.6%, much more than the 0.2% expected in August, according to official statistics published Thursday. The Department of Commerce specifies that the increase in the price of fuel largely contributed to this increase.
Indeed, excluding automobiles and fuels, retail sales increased by only 0.2%.
This sign of the resistance of the American economy could potentially push the Federal Reserve to continue on the path of monetary tightening after its meeting next week.
Especially since producer prices in the United States increased by +0.7% (instead of the expected +0.2%) due to the recent rise in oil prices. The price of a barrel of WTI thus increased by 1.3%, to $90, while a barrel of Brent traded for $93.5 (+1.4%).
On the employment front, the number of registrations for unemployment benefits in the United States increased by 3,000 during the week of September 4, reaching 220,000 according to the Department of Labor compared to 217,000 the previous week (revised figure compared to the 216,000 initially announced).
After the ECB’s announcement, European bond markets relaxed towards 3.12% for OATs and 2.59% for Bunds. US T-Bonds move in the opposite direction with +1.2Pt to 4.27%, weighed down by producer prices and the increase in consumption.
The Dollar takes advantage of the large gap in EU/USA yields to climb +0.7% towards $1.0655/E.
In French company news, Assystem publishes a net profit of 21 million euros for the first half of 2023, compared to 32.7 million a year earlier, and an operating profit from activity down 4.3% to 15.7 million, a margin down 1.2 points to 5.6%.
Esker publishes net profit down 26% to 7.5 million euros for the first six months of 2023, with operational profitability of 11.2% for a turnover of nearly 87.9 million, up 15% (+16% at constant exchange rates).
Finally, TotalEnergies announces that it is launching a call for tenders for the supply of 500,000 tonnes per year of green hydrogen, so as to be able to avoid the emission of around five million tonnes of CO2 per year in its European refineries by 2030.
TotalEnergies also indicated that it had signed an agreement with Air Liquide for the long-term supply of green and low-carbon hydrogen to its Gonfreville platform, to reduce the site’s annual CO2 emissions by up to 150,000 tonnes per year.
Finally, JCDecaux announced this evening that it had won, following a call for tenders, the self-service bicycle contract for the City of Toulouse (4th French city).
Copyright © 2023 CercleFinance.com. All rights reserved.
Did you like this article ? Share it with your friends using the buttons below.
