(CercleFinance.com) – The Paris Stock Exchange is yo-yoing: down -0.8% around 4 p.m., the CAC40 ends the session up +0.33% (around 6.126, close to the zenith of the day) after the decision to raise the main 3 ECB rates.
The improvement is spreading since the E-toxx50 is also advancing by +0.3% in the wake of Wall Street with homogeneous scores of +0.5 to +0.7% on the 3 main indices.
At the end of its meeting, the Governing Council of the ECB indicated that its services had revised their inflation forecasts significantly upwards in the euro zone, which should now settle, on average, at 8.1 % in 2022 (against 6.5%), 5.5% in 2023 (against 3.5%) and 2.3% in 2024 (against 2.1%).
‘Soaring energy and food prices, demand pressures in some sectors as the economy reopens, and supply-side bottlenecks continue to fuel inflation,” he explains.
Economic growth projections have meanwhile been revised significantly downwards for the rest of the year and for the whole of 2023: the euro zone economy is now expected to grow by 3.1% in 2022 (revised from +2.8%), 0.9% in 2023 (against +2.1%) and 1.9% in 2024 (against +2.1% also).
Christine Lagarde asserts that it will take more than 2 meetings (and therefore 2 rate increases of +0.5%) but less than 5 (therefore 4 possible rate increases by March 2023, up to around 2.50/2, 75%) to achieve the establishment of a ‘neutral rate’.
But the boss of the ECB ensures that the decisions will be taken step by step, depending on the figures available, so there is no pre-established plan (no timetable).
The members of the ECB believe that it is too early to consider a ‘quantitative tightening’ (reduction of its balance sheet) in addition to rate hikes: this will be discussed in due course, when inflation is under control.
Christine Lagarde did not provide any details on the mechanisms of her anti-fragmentation plan: the vagueness remains total.
The ECB recognizes that the weakness of the Euro contributes to the strength of inflation, which will prove painful for households.
Despite this, it is therefore determined to put the fight against inflation well ahead of concerns about growth, despite the increasingly precise threat of the European economy falling back into recession.
Jerome Powell spoke at the same time to reaffirm that the FED is completely focused on the fight against inflation.
The firm speech of the ECB propels the yield of the German Bund 11Pts higher towards 1.685% after falling to 1.56% last night, the yield of our OATs tends as much towards 2.255%, the Italian BTPs show +7Pts at 3.93%.
In the United States, the yield on 10-year Treasury Treasuries stabilized at around 3.265%. Registrations for unemployment benefits are down and are back at a 3-week low.
Despite the differential in remuneration very favorable to the Euro, this is not enough: the euro briefly crossed the parity threshold again against the dollar before falling again by -0.3% towards 0.9955 against the greenback.
On the oil market, the prospect of an increasingly surplus global market against a backdrop of slowing global growth does not prevent Brent from recovering +1.5% towards 89 dollars and American light crude (West Texas Intermediate , WTI) advanced 1.7% to 83.6 dollars, but remained at its lowest level since January.
In France, the trade balance showed a deficit of more than 14.5 billion euros for July, compared to a deficit of 13.1 billion the previous month, according to CVS-CJO data from the customs administration.
On the stock side, Capgemini announced the acquisition of Aodigy Asia Pacific, a company based in Singapore, in order to strengthen its capabilities in Asia-Pacific. The group also acquired Knowledge Expert, a digital transformation service provider.
Crédit Agricole SA confirmed on Wednesday evening its intention to acquire approximately 4.8% of the capital of its subsidiary Crédit Agricole Egypt, of which it currently holds 60.5% of the capital according to information on its website.
Getlink, the parent company of Eurotunnel, announces that its Shuttle transported 314,378 passenger vehicles in August, an increase of 113% compared to the same month of 2021, thus achieving the best monthly performance since August 2019 .
Goldman Sachs downgraded its recommendation on Atos on Thursday (-15%), reduced from ‘neutral’ to ‘sell’ with a price target almost divided by three, from 23 to eight euros.
In a research note, the analyst estimates that the turnaround plan developed by the management team – consisting of a separation of the outsourcing (TFCo) and digital transformation (SpinCo) businesses by the second half 2023 – is ‘complex’ and ‘ambitious’, effectively limiting the group’s visibility.
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