The Paris Stock Exchange is rebounding, like other European markets, after the announcement of an unscheduled meeting of the ECB’s Governing Council to discuss current market conditions. This decision comes as the yield on the Italian 10-year bond crossed the 4% mark this week for the first time since 2014, rekindling fears of fragmentation within the euro zone. The 10-year BTP yield eased 23 basis points to 3.93%. The banks BNP Paribas, Agricultural credit and Societe Generale earn between 2% and 3%.
Shortly before 10 a.m., the Bedroom 40 rebounded 0.93% to 6,003.45 points in a business volume of 450 million euros.
The recent surge in bond yields from so-called peripheral countries follows the absence of any concrete announcement from the ECB concerning new tools intended to avoid fragmentation within the countries of the euro zone. The market is therefore speculating on a decision in order to protect the weaker economies. The ECB announced last Thursday the end of its asset purchases at the end of the month and a 25 basis point increase in its main key rates at its July meeting.
The market is also wondering about the extent of the next monetary hike by the Fed, whose decision is expected in the evening, with the fear in sight that too heavy a hand could lead to a recession.
From an increase of 50 basis points at the end of last week, expectations have risen in light of the surprise surge in inflation, now at its highest since the end of 1981 in the United States. The market expects an increase of 75 basis points, which would be unprecedented since 1994, or even 100 basis points.
” We previously expected Fed rates to peak in the 3.25% to 3.5% range in the first half of next year. This forecast is obviously too low, and the peak could now be closer to 4%. But we will wait to see the new economic projections from the Fed and the dot plots. [graphique en points illustrant les anticipations du FOMC en matière de taux d’intérêt] before confirming these forecasts says Paul Ashworth of Capital Economics.
The inversion of the yield curve continues, the yield on the US two-year bond is hovering around 3.3% after touching 3.456%, its highest level since 2007, while that of the maturity at 10 years is trading at 3.41% this morning. US treasury bills serve as a global benchmark, thus financial conditions are tightening across the planet, which is putting strong pressure on consumer purchasing power, especially in emerging countries, which borrow in dollars. .
All options are open for EDF
EDF rises 3.4%. ” All options are on the table” when it comes to the electrician’s future84% controlled by the State, declared on BFM TV the French Minister of Economy and Finance, Bruno Le Maire, when asked about a possible nationalization of the group.
Luxury stocks are recovering in the wake of the announcement of better than expected indicators in China, one of the main markets for the sector. Kering notably garners 2.4%. Jefferies raised its recommendation on the title of the parent company of Gucci from “hold” to “buy” while reducing its target price from 695 to 605 euros.
Airbus appreciates by 1% and Saffron 1.2% following a favorable aerospace rating from Berenberg, who sees “clearer skies on the horizon” for demand in the aerospace and defense sector.