(CercleFinance.com) – The main stock markets are moving without a clear direction this morning in Europe: London is down 0.3% while Frankfurt and Paris are up +0.1% and +0.2% respectively,
Investors have just taken note of the evolution of GDP in the euro zone.
Figures show the zone’s economy contracted slightly in the first quarter, with a 0.1% decline in seasonally adjusted GDP in the region, according to an estimate by the European Union’s statistical office. .
By way of comparison, analysts were counting on the stability of GDP (0%).
Knowing that the GDP had already decreased by 0.1% in the fourth quarter of 22, the region is therefore in a situation of ‘technical recession’, characterized by two consecutive negative quarters.
In addition, the markets have to deal with the rise in government bond yields on the back of fears of tightening monetary policies by the major central banks.
On the bond market, the yield on 10-year US Treasury bonds, a rapid rise in which has often been the cause of stock market corrections, rose sharply above 3.78%.
The trend is the same in Europe where the German ten-year rises to 2.45%, while the French OAT of the same maturity has now reached 3%.
Fears of an acceleration in monetary tightening were fueled yesterday by the Bank of Canada, which announced a surprise rate hike and warned that further hikes may be needed.
In its press release, the central authority justified its decision by the persistence of strong underlying inflation.
“The big question now is whether the Fed will follow suit with another hike next Wednesday or whether it will leave rates unchanged after ten hikes in a row,” said strategist Jim Reid. at Deutsche Bank.
With higher interest rates bound to weigh on activity around the world, investors are more worried than ever about growth.
Economically, the main meeting of the day is set at 2:30 p.m., with the publication of weekly jobless claims in the United States.
In European company news, Eni announces that it signed a memorandum of understanding with Libya yesterday with the aim of studying and identifying opportunities for reducing greenhouse gas emissions and developing energy sustainability in the country.
BAE Systems reports that the ten member companies of the Association du transport urbain du Québec (ATUQ) have ordered up to 1,229 battery-electric buses using BAE Systems’ Gen3 electric drive system.
Finally, Sandoz on the occasion of its Capital Markets Days (CMD) announced that it expects mid-single-digit growth in net sales for 2023 as well as in the medium term (2024 to 2028). Core EBITDA margin is expected to reach 24-26% in the medium term, compared to a forecast of 18-19% in 2023.
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