(AOF) – European markets ended in the red, the US inflation figures fueling the scenario of an accelerated tightening of monetary policy by the Fed. The CAC 40 index closed down 0.41% at 7,001.55 points while the EuroStoxx50 lost 0.11% at 4,190.32 points. The situation was similar in the United States where the Dow Jones lost 0.46% around 5:30 p.m.
The week’s most important statistic, inflation, beat expectations. The inflation rate in the United States rose to 7.5% in January, on an annual basis. This is slightly above market expectations (7.3%) and represents an acceleration from December (7%). Inflation had not reached such a level for almost 40 years.
Core inflation, ie adjusted for the most volatile elements, came out at 6%, against 5.9% expected and 5.5% in December.
In the wake of this publication, the 10-year yield touched 2%, a level not seen since mid-2019. Investors fear that the Fed will normalize its monetary policy faster than expected. Within minutes of that statistic, the market was attributing a roughly 50% chance of a 50 basis point rate hike in March from 28% previously.
The session was also animated by the many results of companies, many of which belonged to the CAC 40. The main Parisian index was dominated by Unibail-Rodamco-Westfield, whose 2021 profit exceeded its expectations. Societe Generale and Crédit Agricole were also supported by their good results and the continued rise in long rates.
Investor reaction to publications from TotalEnergies, L’Oréal and Legrand was negative.
Beyond the results and the CAC 40, Dassault Aviation took off thanks to a contract for 42 Rafale in Indonesia.