Some relief is noticeable in the financial markets this morning after the less “hawkish” tone adopted by Jerome Powell. The chairman of the US Federal Reserve has indeed reassured by committing to fight against inflation without damaging the economy. Enough to revive Wall Street, and hence the Asian markets. Bond yields stabilize ahead of the December US inflation test this afternoon.
During his confirmation hearing before a US Senate committee, Jerome Powell announced that the US economy is strong enough to withstand monetary tightening and pledged to prevent inflation from setting in. This orientation should manifest itself in rate hikes, the reduction of the Fed’s asset purchase program and its balance sheet. Jerome Powell did not signal any acceleration compared to what had already been announced.
The punch bowl neither too full nor too empty
The president of the Fed ” delivered a performance worthy of Goldilocks Et Les Trois Ours Writes Jeffrey Halley, senior market analyst at Oanda. ” Jerome Powell has indicated that the Fed may raise rates to contain inflation, which it plans to quickly begin the process of reducing its balance sheet, but he also announced that inflationary pressures are expected to peak in the middle of year, he sums up.
He adds that “ what he didn’t say is just as important. He did not support four rate hikes in 2022, did not mention March as the start date of the tightening, nor did he indicate when the balance sheet reduction would begin. “. For him, the president of the Fed ” left the bowl [de punch] neither too full nor too empty, but just at the right level in terms of the outlook for financial markets “.
Watch out for inflation!
Other observers have learned from this hearing that the notion of urgency for monetary tightening has not increased significantly compared to the speech given in December at the end of the meeting of the monetary policy committee.
The trend is up in Asia this morning. In Hong Kong, the Hang Seng is moving on five-week highs, boosted by technology stocks, and the CSI 300 of the main capitalizations of the Shanghai and Shenzhen stock exchanges is up more than 1% as the close nears. the slowdown in the rise in producer and consumer prices in China is confirming expectations of new support measures to revive the economy. The contracts futures US indices are up slightly after the S&P 500 ended a series of five straight declines on Tuesday night, while the Nasdaq Composite rose more than 1%.
The market will monitor the December consumer price statistics in the United States at 2:30 p.m. The consensus formed by Bloomberg expects an increase of 0.4% on a month and 7% on a year, which would be a new high of nearly 40 years after 6.8% in November. The Fed will publish its Beige Book at 8 p.m., which takes stock of the economic development over the past six weeks. Before that, Eurostat will have unveiled the industrial production statistics for November in the euro zone at 11 a.m.
OVHcloud confirms its annual objectives
OVHcloud confirmed its objectives for its financial year as at August 31, 2022, after registering a 13.9% increase in sales in the first quarter to 187.2 million euros.
Rexel revised upwards its forecasts for fiscal 2021 and now expects sales growth on a constant number of days to 15.3%, against 12% to 15% previously, and on a gross operating profit margin adjusted by 6.2%, compared to 5.7% previously.