Quickly erased, yesterday’s upsurge was a temporary break as the European stock markets remained firmly established in the bear market zone. Stocks and bonds are falling again, reflecting the limits of the Bank of England’s (BoE) announcement effect and its emergency intervention to stabilize the debt market.
Around 11 a.m., the Bedroom 40 lost 1.48% to 5,679.53 points. Elsewhere in Europe, the Footsie British fell by 1.92% and the Dax German plaice by 1.52%. Note, however, the good performance of Porsche on the occasion of the fifth largest IPO of the last ten years in Europe. The action rose 2.7% to 84.6 euros, above the top of the introductory range of 82.50. This does not prevent the Stoxx 600 of the automobile from showing the largest sectoral decline (-3.7%).
Renewed tension on the bond market
On the bond market, the yield on the British 30-year gilt rose 4 basis points to 3.9636%. It had relaxed by 105 basis points on Wednesday, unheard of since at least 1992, following the intervention of the Bank of England. The Old Lady of Threadneedle Street announced yesterday that she would be buying up to £5bn a day of long-term government bonds until October 14, making a total of £65bn. A decision which follows the announcement by the British government of a program of tax cuts financed by debt, which was very badly received by the markets.
The yield on the 10-year German Bund, which serves as a benchmark in the euro zone, climbed 12 basis points to 2.2410%, while that of the American bond of the same maturity also rose by 12 basis points at 3.8390% after crossing the 4% mark on Wednesday morning for the first time since 2010.
German inflation in sight
The bond market could react at the beginning of the afternoon to the first estimate of the evolution of consumer prices in Germany in September. The consensus formed by Bloomberg expects an increase to 10.2% over one year in harmonized data from the European Union, after 8.8% in August. Also to follow is the second estimate of US GDP growth in the second quarter, which should be confirmed at 1.5% year-on-year.
Wall Street strategists are warning of a wave of euphoria amid Wednesday’s bond market rally, aptly reminding that the hawkish signals sent by Fed officials are what really matters. ” The trace of the gilt (British government bond) is noticeable on the whole of the US Treasuries market during the last week “recalls Bob Miller, head of bond markets for the United States at BlackRock. ” I don’t think what we’ve seen in the bond market reflects a change in the Fed’s approach. “Abounds Steve Boothe, manager at T. Rowe Price.
Accor raises its forecasts, net loss for Orpea
Fed officials continue to hammer home their “hawkish” message, including Atlanta branch president Raphael Bostic, who supports a 1.25% hike in the federal funds rate by the end of the year in an attempt to regain control of inflation.
Accor earn 2%. The hotel group has raised its profit forecast for 2022, while announcing that it will sell its French headquarters in a sale-leaseback transaction.
Orpea 10.6% drop. The operator of retirement homes reported a net loss of 269 million euros in the first half, against a profit of 102 million euros a year earlier. The group said that ” the downward trend in the financial performance of the activities observed in the first half of 2022 could be amplified in the second half, given the additional volatility observed in energy prices “.
Solutions 30 plunged 16.8%. The digital assistance service provider posted a net loss of 11.3 million euros in the first half, during which its gross operating surplus (Ebitda) fell by 40.2%, to 29.6 million euros.