The Paris Stock Exchange is hovering around equilibrium after a 5.75% jump last week. Investors remain cautious about the evolution of the conflict in Ukraine while hoping for further discussions between the two parties to try to reach a negotiated solution. The sharper than expected slowdown in producer prices in Germany is a modest support factor with a rise of 1.4% in February, against 1.7% expected. Over one year, the increase nevertheless reached a record 25.9%.
The market is also watching crude prices, with the barrel of Brent continuing to rebound with a gain of almost 4% to 111.93 dollars, thus returning above 110 dollars for the first time in more than a week, on fears of shortages in supplies as Yemeni Houthi militias armed by Iran have attacked oil installations in Saudi Arabia. The European Union’s dependence on Russian gas has prompted several countries to diversify their supplies, this is particularly the case of Germany, which has signed a long-term energy agreement with Qatar, relating in particular to the supply of natural gas liquefied, without giving further details.
Mid-session, the Bedroom 40 is almost stable at 6,610.912 points (-0.14%) in a business volume of 810 million euros. The contracts future June on American indices yield between 0.3% and 0.4%.
Zelensky demands in-depth talks with Moscow
Turkey’s foreign minister said on Sunday that Russia and Ukraine are close to an agreement on points ” reviews and expressed confidence in the possibility of reaching a ceasefire. Also this weekend, President Zelensky called for in-depth talks with Moscow. Ukrainian Deputy Prime Minister Iryna Vereshchuk, meanwhile, rejected a Russian ultimatum demanding the surrender of the beleaguered port city of Mariupol. This ultimatum expired at 5:30 a.m. local this morning (3:30 a.m. in Paris).
For his part, Joe Biden was to discuss the situation in Ukraine by telephone with Emmanuel Macron, Olaf Scholz, Mario Draghi and Boris Johnson at the end of the morning. He is also expected to meet his NATO and G7 allies in Brussels on Thursday before heading to Poland on Friday.
A fragile rebound
The world’s major stock indices saw their best weekly performance since 2020 last week, with the Cac 40 returning to nearly 2% of its level before the outbreak of war in Ukraine. The question now is whether this rebound is sustainable in an environment weakened by record inflation while the major central banks are preparing to normalize their monetary policy. Christine Lagarde said this morning that she sees no signs of stagflation even though Russia’s invasion of Ukraine is starting to weigh on growth. ” Even in the darkest scenario, with second-round effects, a boycott on gas and oil and an escalation of war over a long period », We would have a growth of 2.3%, she indicated to the Montaigne Institute in Paris.
On the bond market, the yield on the 10-year US bond tightened by 4 basis points to 2.1890% a few hours before Jerome Powell’s speech at the annual conference of the National Association for Business Economics. The US central bank last Wednesday launched a cycle of monetary tightening which should bring the Fed funds rate down to between 1.75% and 3% by the end of the year. Several other Fed officials are also due to speak throughout the week.
Exane’s favorite Thales in the defense sector
Renault gain 1%. The diamond brand has resumed production at its Moscow factory, Reuters reports, citing a spokesperson for the group. Avtovaz, the main Russian car manufacturer controlled by the French group, on the other hand announced that it was partially interrupting its production until March 25 due to a shortage of electronic components.
TotalEnergies gained 1.1% in the wake of the rise in crude prices. CGG (+6.6%) and Vallourec (+3.5%) follow. The seamless tube manufacturer has announced the appointment of Philippe Guillemot as CEO to accelerate the group’s transformation and growth trajectory. Among the other values linked to raw materials, ArcelorMittal rises 2.3%.
EssilorLuxottica takes 1% after an increase in recommendation from HSBC, from “hold” to “buy”. Among other analyst notes, Thales appreciated by 2.4%. The title is the preferred value of Exane BNP Paribas, to “outperformance” on the value, in the defense sector.