PARIS (Reuters) – The main European stock markets, apart from Frankfurt, fell on Wednesday morning amid fears over interest rates before the hearing of the Fed boss before the United States Congress and after the disappointing figures from the British inflation.
In Paris, the CAC 40 lost 0.19% to 7,280.61 points around 08:15 GMT. In London, the FTSE 100 fell 0.27%. In Frankfurt, the Dax gleans 0.08%, thanks in particular to the automotive sector.
The EuroStoxx 50 index fell by 0.05%, the FTSEurofirst 300 by 0.13% and the Stoxx 600 by 0.16%.
Futures contracts also point to another drop on Wall Street the day after a session in the red marked by profit-taking before the intervention at 14:00 GMT by Jerome Powell, the chairman of the Fed, before the Financial Affairs Committee. of the House of Representatives. He will also appear before a Senate committee on Thursday.
Traders widely expect a 25 basis point Fed rate hike next month and a peak in the fed funds rate at 5.5%-5.75% as the US central bank decided this month to leave the cost of credit unchanged.
“Despite the pause decided last week, Fed officials (…) are still surprisingly aggressively pricing in a further 50 basis point rate hike by the end of the year,” Maybank currency analysts point out. .
“It will be important to watch whether (Powell) pushes harder that the Fed is serious about the another 50 basis point hike or gives the impression that it depends on the data,” they said.
In the UK, inflation unexpectedly remained unchanged in May at 8.7% year on year, while the Reuters consensus forecast a deceleration in consumer prices (CPI) to 8.4%, shows the data of the day. This statistic should increase the pressure on the Bank of England (BoE) in view of a 13th consecutive increase in its key rate on Thursday, to 4.75%, while the peak of this rate is now seen at 6%.
On the stock market, the real estate compartment (-2.17%), sensitive to the evolution of the cost of credit, shows the biggest drop on the pan-European Stoxx 600.
The banking sector (+0.67%), the most likely to benefit from a rise in rates, is at the top of the index. The automobile (+0.70%) is also sought after as the Association of European Automobile Manufacturers (ACEA) reported on Wednesday an 18.2% increase over one year in new car registrations in Europe .
Renault and Stellantis posted the two best increases in the CAC 40 with respective gains of 2.88% and 1.29%.
Growth stocks like Hermès (-1.44%) or Dassault Systèmes (-0.97%) are penalized by the prospect of monetary tightening, with bond yields in the euro zone tightening slightly.
(Written by Claude Chendjou, edited by Kate Entringer)
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