(CercleFinance.com) – The Paris Stock Exchange (+1.2%) at 7,620 strongly crosses the 7,600 points mark.
Shortly after the opening, the CAC 40 even briefly set a new absolute record at 7,654 points, setting a new absolute record.
As widely anticipated by the markets, the American Federal Reserve decided last night to keep its rates unchanged, while opening the door to a ‘pivot’ in favor of monetary easing from next year (3 easings while the markets in ‘price’ now the equivalent of 8 or 9 (including -50Pts), and 6 at least.
‘We consider this to be a strong signal that the Fed is starting to prepare the markets for rate cuts, based on the economic data received,’ comment analysts at Danske Bank.
This prospect is particularly evident if we base ourselves on the CME FedWatch barometer: investors now estimate the probability of a 25 basis point rate cut in March at more than 80%, compared to less than 40% yesterday.
‘The question is (…) no longer whether monetary policy will be relaxed, but when and at what speed’, estimate the Oddo BHF teams.
By also favoring the scenario of a ‘soft landing’ of the American economy (growth of +2.8% in 2024 while the OECD barely anticipates a third), Jerome Powell – the president of the central bank which confirms the n’Goldilocks scenario hoped for by Wall Street- has precipitated the general runaway of the stock markets, which were already moving at record levels.
Jerome Powell’s very ‘dove’ comments led to a spectacular reaction in the bond sector, causing the yield on 10-year Treasuries to plunge towards 3.944% (25 points in 24 hours), something not seen since July.
Now it’s time for the ECB, which also opts for a ‘status quo’ on its rates following the meeting of its governing council, scheduled for the morning.
Following the conciliatory announcements from the Fed and in anticipation of a more neutral tone from the ECB, the euro rose against the dollar to return to trading in the $1.09/euro zone.
At the end of its monetary policy meeting in Frankfurt, the board of governors of the European Central Bank (ECB) decided to leave its three key interest rates unchanged, at 4.50% and 4.75% respectively. and 4.00%.
Based on its current assessment, the council considers that ‘the ECB’s key interest rates are at levels which, maintained for a sufficiently long period, will contribute significantly to achieving’ its target of 2% inflation at middle term.
He also decided to bring forward the normalization of the Eurosystem’s balance sheet.
In the first half of 2024, it intends to continue the full reinvestment of principal repayments of maturing securities acquired under the PEPP.
The board then plans to reduce the PEPP portfolio by an average of €7.5 billion per month in the second half of the year, and intends to end reinvestments under the PEPP at the end of 2024.
As for American indicators, retail sales in the United States increased by 0.3% sequentially in November 2023, where the consensus expected a slight decline, after a drop of 0.2% the previous month (revised from an initial estimate which was -0.1%).
The Department of Commerce, which publishes these figures, specifies that excluding the automobile sector (vehicles and equipment), American retail sales increased by 0.2% last month, after stability in October.
The Department of Labor announces 202,000 new registrations for unemployment benefits in the United States the week of December 4, a figure down by 19,000 compared to the revised figure for the previous week (221,000, compared to 220,000 initially announced).
The four-week moving average stood at 213,250 last week, down 7,750 from the previous week’s revised average.
Finally, the number of people regularly receiving compensation increased by 20,000 to stand at 1,876,000 in the previous week, the most recent period available for this statistic.
In the news of French companies, Atos indicates that Onepoint, its reference shareholder since November 1, has increased its stake in the capital to 11.4%, and that it intends to continue a constructive dialogue with it, as with the all of its shareholders.
Air France-KLM confirms its outlook for the 2024-26 period and sets objectives for the 2026-28 period, including a further increase in its profitability with an operating margin above 8%.
Bayer announced on Thursday the signing of a partnership with the French start-up Iktos for the use of AI in the discovery and development of new crop protection products.
Finally, Dassault Systèmes and Dassault Aviation announced Thursday that they would deepen their collaboration, now expected to include maintenance, repair and overhaul (MRO) activities for combat aircraft.
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