The Paris Stock Exchange is settled in the green, supported by the hope that the Fed could reduce the pace of its rate hikes, but the further deterioration of activity in the euro zone in October encourages investors to limit initiatives. The composite PMI index (synthesis between industry and services) calculated by S&P Global fell by 1 point to 47.1 in flash data, a low of nearly two years. In particular, the survey continues to reflect strong inflation linked to energy prices and upward pressure on wages.
” These surveys are in line with our estimate that the euro zone will experience a greater slowdown in its GDP than the consensus (or the ECB) anticipates (we expect a contraction in GDP of nearly 2% per year next), but inflation will remain well above the ECB’s target for a long time to come notes Andrew Kenningham, Chief Economist Europe at Capital Economics.
Mid-session, the Bedroom 40 gained 0.96% to 6,093.43 points after a peak at 6,116.20 (+1.33%), in a volume of 720 million euros. The contracts future on American indices yield between 0.2% and 0.4%. You’re here fell nearly 3% in pre-market after the announcement of a drop of around 9% in the selling price of its Model 3 sedans and its Model Y utilities in China.
The week also promises to be busy with the highlight being the monetary decision of the ECB, which should opt for a 75 basis point increase in its interest rates, and third quarter GDP in France, in Germany and the United States. The Gafam (Alphabet, Apple, Amazon, Meta and Microsoft) will also enter the fray in the coming days with the publication of their third quarter results. In France, 18 components of the Cac 40 will reveal their quarterly turnover.
Erratic movements on the pound sterling
The pound saw sharp swings following the withdrawal of Boris Johnson’s candidacy for the leadership of the Conservative Party to succeed Liss Truss as Prime Minister. The British currency gained up to 0.9% against the dollar before falling back to 1.1308 (-0.6%). So far only Rishi Sunak and Parliamentary Relations Minister Penny Mordaunt have applied.
The latter, however, would not have collected the 100 sponsorships of deputies necessary to compete, unlike her rival and former finance minister of Boris Johnson. The limit to reach this quota is set at 2 p.m. (London time). If a single suitor obtains these 100 supports, he will automatically be appointed Prime Minister. Rishi Sunak is therefore the favorite. If Penny Mordaunt is qualified, a first ballot to decide between the two candidates is scheduled for 6 p.m. (7 p.m. in Paris).
Imerys will exploit a lithium deposit in France
On the bond market, the yield on the British 10-year gilt fell 12 basis points to 3.87%. That of the American T-Bond of the same maturity fell by 2 basis points to 4.19%. According to Wall Street Journal, the Federal Reserve could debate reducing the magnitude of the rise in the cost of money in December. However, the market expects another 75 basis point hike in the Fed funds rate next week.
Imerys increased by 3.9%. The specialist in minerals for industry has announced the commissioning by 2027 of a lithium deposit in France in the Allier department.
Solvay appreciated by 1.2%. The specialty chemicals group raised its full-year guidance, citing higher-than-expected third-quarter profit.
The quotation ofOrpea was suspended this morning at the request of the regulator, announced Euronext. On his side, Korian gives up 2.5%.
Within the CAC 40, Airbus gain 1%. Saudi Arabia is in advanced negotiations with the aircraft manufacturer for an order for nearly 40 A350s, according to industry sources quoted by Reuters. The kingdom would seek to create a new airline in order to compete with the major carriers of the Gulf countries.
Renault on the contrary, loses 2.6%. The discussions between the French manufacturer and Nissan on the investment of the Japanese group in the electric entity of its French partner stumble on the sharing of technologies, reports Reuters, citing sources familiar with the matter.