The Cac 40 starts in the green ahead of producer prices in the euro zone

The Paris Stock Exchange progressed Monday morning at the start of the first full week of the third quarter. However, the day promises to be particularly calm due to the closure of the American markets for Independence Day.

Around 9:30 a.m., the Bedroom 40 gained 0.71% to 5,973.23 points in a business volume of barely 200 million euros.

The next few days will be loaded with leading indicators, including the publication on Wednesday of the minutes of the Fed’s monetary policy committee last month, as well as that of the June employment report in the United States. But before that, investors will take note, at the end of the morning, of the evolution of producer prices in the euro zone in May. The consensus established by Bloomberg expects the rise to slow to 36.6% over one year, after 37.2% in April.

From recession to inflation

The signs of an economic slowdown are multiplying, in the United States as elsewhere, and now appear in all the statistics, whether in consumer spending or industrial activity. The prospect of a recession thus takes precedence over the only fears concerning inflation. Market psychology has drastically shifted from inflation considerations to firmly growth-centric sentiment “Summarizes Chris Weston, head of research at Pepperstone Group, quoted by Bloomberg. He adds that the risk now is that the Fed will be too slow to reverse the trend on rate hikes.

The market is pricing an 85% chance of a 75 basis point hike in the Fed funds rate at the end of the month and a 3.25% to 3.5% level in the cost of money at the end of the month. of the year. He is also counting on a policy of reducing interest rates in 2023 and 2024 in the face of the growing risk of recession, underline the economists of NAB.

According to the Atlanta Fed’s GDPNow Forecast model on growth prospects based on the latest indicators, US GDP is expected to contract by an annualized 2.1% in the second quarter, suggesting that the economy is on the verge of going into technical recession after a decline of 1.6% in the first three months of the year.

Banks in the crosshairs of the ECB

In China, a county near Shanghai is facing an outbreak of Covid-19 contamination that threatens the Jiangtsu delta region, a crucial area for the country’s economy. The surge poses a risk to the supply chain of solar panels, medicine and microchips, and a test for Beijing’s policy of zero Covid by way of mass testing and lockdowns.

Closer to home, the European Central Bank is considering how to prevent eurozone banks from taking too big a profit advantage of the subsidized loans they have largely benefited from during the pandemic, as it prepares to raise interest rates, reports the FinancialTimes.

Main supporter of the Cac 40, TotalEnergies rose by 3.1% while the barrel of Brent gained a few points to 111.72 dollars.

Technip Energies rises 2.8%. The oil services group won an engineering, equipment supply and construction contract with Hafslund Oslo Celsio for a carbon capture and storage project associated with the waste-to-energy plant in Oslo, Norway. The amount of the contract is between 250 and 500 million euros.

CGG garners 4.2%. Sercel, its Sensig and Monitoring subsidiary, has been named as the successful bidder for the acquisition of the software division of ION Geophysical Corporation.

Orpea takes 1.8%. The operator of retirement homes has reported a profound renewal of its board of directors, with the intention of appointing the former CEO of SNCF, Guillaume Pepy, as chairman.

Elior appreciated by 0.7%. The collective catering group indicated that its board of directors had decided to combine the functions of president and general manager and chose, unanimously, to entrust Bernard Gault with the post of CEO.

Source link -91