Following in the footsteps of the rebound on Wall Street, the Paris Stock Exchange is extending its leap from the day before as the European Central Bank’s monetary verdict approaches. The trend is generally tightening whether in the United States, Canada, New Zealand and, most recently, South Korea. In New York, the Nasdaq Composite, sensitive to changes in interest rates, nevertheless closed on a gain of 2%, interrupting a series of three declines in a row.
Shortly before 10 a.m., the Bedroom 40 gained 0.41% to 6.5691.13 points in a business volume of 370 million euros.
The Governing Council of the ECB will publish its monetary policy statement at 1:45 p.m., before Christine Lagarde’s press conference, scheduled for 2:30 p.m. No decision on interest rates is expected, but the central bank could give more indications regarding the withdrawal of its asset purchase program, without setting a precise date. Like its American counterpart, the European Central Bank is more concerned about inflation, which has reached a record 7.5% in the euro zone, than about the war in Ukraine. It has also already indicated that it will only raise its interest rates once the quantitative easing is over.
See you in June?
No major decision is therefore expected today, but the June meeting, during which the new economic projections will be presented, could be an opportunity to clarify the evolution of monetary policy. Be that as it may, Christine Lagarde will have to recognize that inflation is much higher than expected. And, in our view, monetary officials should be quick to advance their rate hike schedule once again as inflation continues to surprise on the upside. “says Andrew Kenningham, chief economist Europe at Capital Economics.
The US Federal Reserve has already raised its interest rates by a quarter of a point to fight inflation and is preparing to raise them by half a point in May and June. Meanwhile, consumer price inflation has eased in core data, which excludes volatile developments in food and energy, raising hopes that inflation is approaching its peak. Thus, the Fed could ultimately be led to proceed with less monetary tightening than expected, at least that is what the market seems to be hoping for.
Hermès and EssilorLuxottica lead the Cac 40
Asian markets rose this morning, driven by Wall Street, as well as the 1.3% rise in the Chinese CSI 300. The country’s authorities have made it clear that they are planning to take measures to support the economy, which could include lowering the reserve requirement rate of the big banks in order to revive an economy weakened by the confinements due to the outbreak. Covid-19 infections. An announcement to this effect is expected during the day, which benefits in particular ArcelorMittalwhich gained 1.1%.
Hermes increased by 2.7%. The luxury saddler recorded a 27% jump in revenues to 2.8 billion euros at constant exchange rates in the first quarter, driven by demand for luxury accessories, especially in Europe and across the Atlantic, while that the sector is suffering from the fallout from the war in Ukraine and the measures to combat the coronavirus in China. Hermès also confirmed its medium-term outlook.
The other values related to luxury follow the movement, like Kering (+1.4%), LVMH (+0.9%) and L’Oreal (+1.3%).
Also note the rebound of Remy Cointreau (+3.1%) and Pernod Ricard (+0.9%).
Rising at the opening, Publicis down 1.8%. The advertising group reported organic growth of 10.5% in the first quarter, above analysts’ expectations, without however revising its forecast for the whole of the year due to economic uncertainties.
EssilorLuxottica advance of 2.6%. Morgan Stanley raised its price target from 190 to 195 euros while maintaining its opinion to “overweight”. Conversely, Ruby fell by 4.9% while Oddo BHF went from “neutral” to “underperformance” on the share by reducing its target price from 30 to 27 euros.