The attempt to rebound again failed on the Paris Stock Exchange, the market reacting to the stronger than expected rise in consumer prices in the United States in September. The latter increased by 0.4% over one month, twice as much as expected, marking a clear acceleration after the 0.1% increase recorded in August. Over one year, the slowdown is also less marked than expected at 8.2%, after 8.3% and 8.1% expected, while in “core” data (excluding food and energy), the increase reached 6.6% year-on-year, a 40-year high, compared to 6.5% expected and 6.3% in August.
Hopes of a Fed inflection in the scale of its rate hikes are now completely dismissed with the risk that a fourth consecutive mega-tightening will increase the pressure on an already struggling global economy. The probability of a 75 basis point tightening on Nov. 2 is now rated at 97.5%, down from 75.2% last week. On the bond market, the yield on the 10-year US bond rose back above 4%.
Around 3 p.m., the Bedroom 40 fall of 1.41% to 5,736.43 points in a business volume totaling 1.5 billion euros. The contracts future on US indices yield between 1.4% and 1.8% The day before, S&P 500 had closed on a floor of 18 months.
The hope of a Fed inflection totally dismissed
Released yesterday, the “minutes” of the last meeting of the Fed’s monetary policy committee showed that several of its members insisted that “ the cost of an action that is too weak to lower inflation is probably higher than that of an action that is too strong “. The minutes also reveal that some officials are arguing for a slower pace of rate hikes, which caused a sudden but temporary jump on Wall Street yesterday.
” Although the minutes gave some signs that Fed officials are beginning to lay the groundwork for an eventual slowing in the pace of rate hikes, the overall tone was still hawkish, suggesting that the Fed will continue with a further 75bp hike at November meeting sums up Michael Pearce, Senior US Economist at Capital Markets.