To great ills, great remedies. The more the days passed, the more the probability increased that the European Central Bank (ECB) opted for a “jumbo” increase of 75 points in the key rates in the euro zone to counter inflation, which peaks at 9.1% over one year. in the region – a record. This is what she did this Thursday, September 8, for the first time in two decades of existence. The refinancing rate thus increases to 1.25%, the deposit rate to 0.75% and the marginal lending facility rate to 1.5%. From now on, the rates are at their highest for 10 years… And the movement should not stop. ” The monetary institution will continue to raise the cost of money until it reaches the neutral rate, i.e. between 1.5% and 2% “, Estimated Bruno Cavalier, the chief economist of the bank Oddo BHF, during a press conference Thursday.
What about side effects? ” Le Fed boss Jerome Powell said they will be painful and will involve sacrifices, as also recalled by Isabel Schnabel, who is probably the most influential person in the ECB, more than Christine Lagarde “, its president, underlined the economist, adding that the recession has become inevitable on the Old Continent. In its central scenario, the probability of which is estimated at 60%, Oddo BHF expects a “ moderate European recession accompanied by a global slowdown without a generalized financial crisis. ” In Europe, the newflow is clearly negative, it is the region most exposed to the energy crisis […] Many companies could put their employees on technical unemployment. »
Inflation forecasts revised upwards
This sentiment is shared by the President of the ECB, who foresees a rise in the unemployment rate and still high inflation. The institution has also significantly raised its projections in this area, counting on inflation at 8.1% this year, against 6.8% estimated in June, then at 5.5% in 2023 and at 2.3% in 2024, against 3.5% and 2.1% expected until then. As for the region’s GDP growth, it is expected at 3.1% this year (2.8% in June), 0.9% in 2023 (2.1%) and 1.9% in 2024 (2.1%). This price increase is linked to the energy crisis and the depreciation of the euro. The single currency remains anchored below parity with the dollar, at 0.9957.
By opting for an increase of 75 basis points, the monetary institution of the euro zone is following in the footsteps of the Bank of Canada and the American Federal Reserve, which has already carried out two increases of such magnitude, in June and then July.
After a low of 6,034 points, in the middle of a Christine Lagarde press conference, the Bedroom 40 recovered from his emotions. The Parisian index is on the rise again, helped, once again, by Wall Street. It ends with a gain of 0.33%, at 6,125.90 points, in a trading volume of 3 billion euros.
Bad day for Atos
On the values front, Remy Cointreau took 1.24%. The spirits group has announced a share purchase program for a maximum of one million shares, or 1.94% of the capital.
Also on the rise, Crossroads gained 0.62%, helped by Barclays, which reiterated its recommendation to “overweight” the title of the distribution group to aim for a target price of 22 euros, arguing an excessive discount compared to other players in the sector. For his part, Redburn took over the cover of the publicity group Publicis (+1.4%), which he judges “ poorly valued “. It is “purchase”
Conversely, Atos plunged 15.14%. Goldman Sachs downgraded the value from “neutral” to “sell” and reduced its target price from 23 to 8 euros. For the broker, the profile of the company is fragile and the recovery will be long, between slow growth, high costs and debt risks.