The Paris Stock Exchange is recovering, supported primarily by banking stocks after the “hawkish” comments from the President of the US Federal Reserve. Closer to home, Bundesbank President Joachim Nagel said the ECB should raise rates this year if inflation warrants. The conflict in Ukraine has caused a surge in commodity prices, prompting Europeans to consider sanctions against Russian oil and gas, as well as to think about group purchases of gas.
Mid-session, the Bedroom 40 increased by 0.70% to 6,628.11 points in a business volume, however, limited to 875 million euros. In Frankfurt, the Dax wins 0.90%. The contracts future June on US indices gain between 0.3% and 0.5%.
Jerome Powell said Monday evening that the US Federal Reserve must act ” quickly to control excessively high inflation and that it could, if the situation requires it, be more aggressive. Thus, it will not hesitate to raise its 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 paved the way for a 50 basis point hike in the Fed funds rate in May, but also to d other tightenings of the same magnitude. The Fed raised the federal funds rate by a quarter point last week, the first since 2018.
TotalEnergies and the banks in the spotlight
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 of 2.3607% this morning, while the market now assesses the probability of a 50 basis point hike in the Fed funds rate in May. The yield on the German bond with the same maturity is hovering around 0.51%, its highest level since October 2018. The banks’ Stoxx 600 posted the best sector performance in Europe with a gain of 2.2%. BNP Paribas advance of 2.2%, Agricultural credit by 2.2% and Societe Generale by 1.8%.
TotalEnergies takes another 2% despite the stabilization of the barrel of Brent from the North Sea at 115.69 dollars, against 119.48 at the high of the day. Still in the energy sector, Engie garners 1.7%.
Other value related to raw materials, ArcelorMittal rises 3.8%.
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.