Caution remains in order on the Paris Stock Exchange. Investors are limiting initiatives with central bank strategy in their sights. They fear that the latter will tighten their monetary policy at a time when growth is showing signs of slowing down at the global level. The Australian central bank announced this morning a surprise increase of 25 basis points in its key rates to bring them to 4.1%, the highest in 11 years. Further tightening may be needed to ensure that inflation returns to its target. Canada’s central bank will announce its monetary decision tomorrow.
Mid-session, the Bedroom 40 yields 0.26% to 7,182.03 points in a narrow business volume of barely 520 million euros. The contracts future on US indices are hovering just below equilibrium.
Retail sales stagnated in the euro zone in April, where the consensus had expected a rebound of 0.2% after two consecutive months of decline. The economic situation is hardly any brighter in Germany, where industrial orders fell by 0.4% in April, against an expected rebound of 2.8%. On Monday, Christine Lagarde, the President of the European Central Bank, left the door open for further rate hikes by repeating that it is still too early to estimate that underlying inflation has peaked despite ” signs of moderation “. The ECB will deliver its monetary verdict on June 15, one day after the Fed. The latter having entered a period of blackout, attention is naturally focused on economic indicators in order to track down the slightest clue likely to influence its policy.
The US service sector in the gray zone
The unexpected slowdown in the growth of activity in the services sector in the United States in May cast a chill on Monday, suggesting, contrary to the strength of the job market, a weakening of the American economy. The ISM index indeed came out at 50.3 points, just above the critical threshold of 50 points which separates expansion and contraction of activity. However, like the moderation in wage growth, the prices paid component of the ISM index, which fell to a three-year low, reinforces the feeling that the Fed could overlook a rise in wages. rate next week.
” With US central bank officials now muzzled until after the monetary decision is announced next week, markets must now reconsider whether a pause will be seen. (…) or whether there will be a further 25 basis point hikesums up Michael Hewson, chief market analyst at CMC Markets. The odds are still leaning towards a break, however inflation figures will still have to be faced “, He warns while the statistics will be published the day before the announcement of the decision.
TotalEnergies continues to decline, Publicis leads the Cac 40
Sensitive to changes in interest rates, technology stocks are generally down, like Capgemini (-1.1%). STMicroelectronics loose 1.7% like other suppliers ofApple the day after the presentation by the American group of its virtual and augmented reality helmet, “Vision Pro”, which will be sold for 3,499 dollars. TotalEnergies lost 1.5% in the wake of crude prices, fears of an economic slowdown taking precedence over the decision of Saudi Arabia to reduce its production. Conversely, Publicis gains 1.3%. Its American subsidiary Publicis Sapient announced the acquisition of Corra in the United States in order to strengthen the expertise of its commerce solutions division. An operation that makes sense, according to Citi analysts.