The Paris Stock Exchange should get off to a good start to a busy week in terms of corporate publications and macroeconomic events, culminating in the ECB’s monetary decision and third quarter GDP in France, Germany and in the USA. But before that, the market will have to deal with the S&P global PMI indices of activity in the private sector in October in the euro zone, this morning, and across the Atlantic this afternoon.
In China, growth reached 3.9% in the third quarter, exceeding analysts’ expectations, which had forecast an increase of 3.3%. The publication of the GDP had been postponed due to the XXth Congress of the Communist Party. Unsurprisingly, Xi Jinping was reappointed for a third term and tightened his grip on the party’s governing body.
Movements on the yen and the pound sterling
Asian markets are moving in mixed order this morning, with the Tokyo Stock Exchange’s Nikkei 225 nonetheless advancing 0.3% following rumors of intervention by the Bank of Japan to support the yen against the dollar. According to FinancialTimesthe Bank of Japan would have sold for 30 billion dollars to remedy the weakness of the yen, which strongly increased the cost of imports.
The pound is also seeing sharp swings following Boris Johnson’s withdrawal from the Conservative Party leadership race to succeed Liss Truss as Prime Minister. The British currency rose to 1.1409 dollars before falling back around 1.1360 (-0.2%). For the time being, only Rishi Sunak and the Minister for Relations with Parliament Penny Mordaunt have applied. Former Finance Minister Rishi Sunak is the favourite. Candidates have until 2pm (London time) to secure the sponsorship of 100 MPs. If a single suitor obtains these 100 supports, he will automatically be appointed Prime Minister. Otherwise, a first ballot to decide between the two, or three candidates maximum, is scheduled for 6 p.m.
Towards a debate within the Fed
Overall, financial markets followed suit on Wall Street, which completed its best week since June, driven by expectations of a slowdown in the pace of Fed rate hikes following information from the wall street journal evoking the fears of some officials that the rise in rates would weigh too heavily on activity. The yield on the US 10-year bond eased around 4.15% in Asia this morning, against 4.21% at the close on Friday. St. Louis Fed President James Bullard and his San Francisco colleague Mary Daly insisted on Friday that the Federal Reserve should debate how high to take the Fed funds rate and the timing of a cut in the Fed funds rate. extent of the rise in the cost of money.
Beyond the ECB’s monetary decision on Thursday, which should result in a 75 basis point tightening of the refi rate, the week will be animated by the publication of the third quarter results of Gafam (Alphabet, Apple, Amazon, Meta and Microsoft), as well as by the turnover of 18 components of the Cac 40.
Dissension between Renault and Nissan
The talks between Renault and Nissan on the investment of the Japanese group in the electric entity of its French partner are stumbling over the sharing of technologies, reports Reuters, citing sources familiar with the matter.
Imerys announced the commissioning by 2027 of a lithium deposit in France in the Allier department.