The Paris Stock Exchange is once again in the red on Monday, but reduced its losses from the low of the morning, when it lost nearly 2%. If New York opens further down, around 0.4% to 0.6% depending on the indices, the Cac 40 only loses 1.1%, on the threshold of 6,200 points, supported by the weakening gas prices, down 10% to levels of just over 300 euros per megawatt hour. A breath of fresh air as the surge in energy prices has been fueling inflation for several months now on the Old Continent.
Two explanations for this. Yesterday, Robert Habeck, Germany’s economy minister, said gas storage facilities are filling up faster than expected in the country. The largest economy in the euro zone should thus reach the target of 85% filling as early as next month. The ruling coalition in Berlin had demanded that the facilities be 85% full by the 1er November and 95% a month later, in anticipation of winter and under the threat of a gas supply cut from Russia. In Paris, Engie drops nearly 4%, the biggest drop in the Cac 40.
Contingency plan in Europe
At midday, moreover, the President of the European Commission Ursula von der Leyen indicated in the context of a speech in Slovenia that the Union is planning urgent measures to bring down electricity prices: “ Soaring electricity prices now reflect, for various reasons, the limits of our current conception of the electricity market. It was developed under completely different circumstances and with completely different goals. That is why we are now working on an emergency intervention and on a structural reform of the electricity market. »
On the merits, the markets nevertheless remain under the impact of the firmness of the tone employed by the central bankers, Friday, during the symposium of Jackson Hole. He is ” Gone are the days when we could count on a stock market rally backed by Powell “, summarized this morning Ipek Ozkardeskaya, at Swissquote. In his address to Jackson Hole on Friday, Fed Chairman Jerome Powell was sharp and to the point: “ His message was crystal clear: inflation must come down even if it means pain for households and businesses “.
Surprisingly resilient employment
In other words, expect key rate hikes to continue, and in movements whose magnitude should remain strong. During the next session in September, the monetary policy committee could thus opt for a further tightening of 75 basis points. It would be the third in a row. Especially since Jerome Powell also mentioned how surprisingly resilient the US job market is. He thus hinted that the Fed could be tolerant of some deterioration in the employment figures. It is this Friday that the statistics relating to the labor market for the month of August will be unveiled.
Representatives of the ECB also went there with their offensive remarks on Friday in Wyoming. Both Isabel Schnabel and François Villeroy de Galhau have declared themselves in favor of a sharp rise in interest rates in September, in the face of still very high inflation which could undermine the central bank’s credibility in the fight against soaring prices. . A 75 basis point hike at the September 8 meeting cannot be ruled out.