The Paris Bourse is expected to fall as Jerome Powell says he is ready to raise rates by more than 25 basis points in May. The market also remains focused on the evolution of the conflict in Ukraine.
Powell even more aggressive on rates, the Cac 40 poised to continue its decline | Photo credits: Ahn Young-joon/AP/Sipa
The Paris Stock Exchange is preparing to continue its decline in the face of the Fed’s determination to counter inflation and in the absence of prospects for appeasement in Ukraine. Crude prices continue to rise amid fears of a European embargo on Russian oil.
Jerome Powell said on Monday that the US Federal Reserve will not hesitate to raise interest rates by more than 25 basis points if necessary. Speaking at a conference organized by the National Association for Business Economics (NABE), the Fed Chairman said the central bank will do everything in its power to fight inflation, paving the way for a 50 basis point hike in the Fed funds rate in May, but also to other tightening of the same magnitude. The Fed raised the federal funds rate by a quarter point last week, the first since 2018.
No lull in the conflict in Ukraine
While Wall Street limited its decline at the close on Monday, the yield on the US 10-year bond hit a nearly 3-year high at 2.3453% this morning, while the market now assesses the probability at 65% a 50 basis point hike in the Fed funds rate in May.
The conflict in Ukraine, which has now lasted for almost a month, shows no sign of abating, with Russian forces continuing their bombardment, while kyiv has rejected a Russian ultimatum to lay down arms in the besieged port city of Mariupol . The prolonging of the war continues to weigh on the morale of investors by reinforcing fears of shortage of raw materials, especially as the Europeans could consider imposing sanctions on Russian oil. At the same time, Saudi oil installations have been targeted by Houthi militias armed by Iran. The barrel of Brent from the North Sea rose 2.5% to 118.47 dollars.
On the value side, Liquid air unveiled its new strategic plan for 2025, which includes a sales growth target on a comparable basis of 5% to 6% on average per year. The group also expects a return on capital employed (ROCE) of more than 10% from 2023, as well as growth in its operating margin of more than 160 basis points between 2022 and 2025.
Tikehau Capital plans to reach more than 65 billion euros in assets under management by 2026, i.e. double its assets at the end of 2021, announced the French asset management group.