(BFM Bourse) – As expected by the market, the European Central Bank raised its key rates by 50 basis points. The speech of its president, Christine Lagarde, was perceived as a little more flexible by the market.
While she had gripped the markets in December, Christine Lagarde, President of the European Central Bank (ECB), this time seems to satisfy them.
His institution raised its key rates by 50 basis points as widely expected by the market and signaled that it intended to do the same at its next meeting in March. It will then assess during this event “its future monetary policy trajectory”, on the basis of the latest projections from its economists.
Christine Lagarde was careful to point out that this deadline was not synonymous with the end of rate hikes. “We still have ground to cover,” she declared in this regard during her press conference, adding that the “pinnacle” (the peak) had not been reached.
This did not bother investors who, a priori, perceived signs of flexibility in the speech of the central banker, in particular when she estimated that the risks on the outlook for inflation and growth had become “more balanced” since December, especially for “short-term” inflation.
While the U.S. Federal Reserve (Fed) and Bank of England (BOE) also delivered reassuring announcements for investors, “the market wants to believe and see in one direction and the direction is that” for investors. three central banks “we are at a meeting or two meetings from the peak”, explained on BFM Bourse, Yannick Lopez, director of rate management at OFI AM. “We feel the market a little relieved,” he adds.
Until recently central bankers “fighted market expectations with a certain virulence, there it is clear that they are fighting them with much less force”, develops the manager.
Faced with all of these announcements, the CAC 40 accelerated its rise, gaining more than 1.2% around 3 p.m. and another 0.8% around 4:15 p.m., while it was close to stability before the announcements of the ECB. The euro completely unscrewed him, falling 0.9% against the dollar to 1.0897 dollars, while he too was in balance before the announcements of the ECB.
Yields on government bonds in the euro zone are collapsing. The yield on the 10-year German bond drops 18 basis points (or 0.18%) to 2.098% while the yield on the 10-year equivalent Treasury bond falls more than 20 basis points to 2, 53%.
Julien Marion – ©2023 BFM Bourse