The Paris Bourse gives up a few points, in a market which remains marked by high volatility. The tightening of monetary policy by central banks and geopolitical tensions continue to weigh on financial markets, in parallel with the rise in bond yields. In this context, investors remain focused on US inflation, whose September figures will be published on Thursday.
At 9:30 a.m., the Bedroom 40 yields 0.24% to 5,826.77 points after a low point at 5,777.66 (-1.07%) shortly after the opening. The volume of business remains limited with barely 200 million euros traded on the values of the index.
The Bank of England announced this morning the extension of its emergency bond purchase program to inflation-linked securities and warned of ” significant risks related to the dysfunctions caused by the massive sales by pension funds and which threaten British financial stability.
Asian markets continued to decline on Tuesday, dragged down by technology stocks, sensitive to changes in interest rates. The sector is also reacting to new restrictions announced by the US administration on semiconductor exports to China. In New York, the Nasdaq Composite fell 1% on Monday evening to close at its lowest level since May 2020.
Lael Branard walks on eggshells
The yield on the US 30-year bond hit a nearly 9-year high of 3.952%, up 11 basis points, as the bond market recovered from the Columbus Day pause. Investors continue to analyze the speeches of Fed officials looking for the slightest sign of a change in tone in their “hawkish” approach.
VP Lael Brainard sounded cautious, noting that recent rate hikes continue to work their way through the economy, while the Chicago Fed’s Charles Evans said he was in a hurry to get to the point where monetary officials will be inclined to pause in order to avoid the risk of going too far.
Dimon sees a recession in the United States by summer
Three days before the publication of the consumer price index, the market assesses at almost 80% the probability of a fourth consecutive hike of 75 basis points in the Fed’s rates if inflation turns out to be higher expectations to.
JPMorgan boss Jamie Dimon anticipates a recession within six to 9 months in the United States, believing that the rebound observed after the health crisis will eventually come up against the Fed’s efforts to control inflation, especially since the war in Ukraine adds to the uncertainties. Speaking on CNBC, he added that he anticipates a further 20% drop in the S&P 500. JPMorgan is among the banks that will release their quarterly results on Friday.
The International Monetary Fund’s global economic forecast is the main event of the day, as the IMF and World Bank warned of signs of recession as economies in developed countries slow and inflation surges. central banks raised rates, adding to pressure on developing country debt.
Sanofi pulls out of the game
ArcelorMittal loses 1.3% and Capgemini 1% after being removed from the “Focus Europe” list of Jefferies’ favorite European stocks.
Conversely, Nexity appreciated by 2.4% following a note from Barclays, which began to cover the title to “overweight”.
Sanofi increased by 1.6%. The pharmaceutical group has announced last-minute positive results for a phase 3 trial involving the experimental use of its drug Dupixent (dupilumab) in children aged 1 to 11 suffering from eosinophilic esophagitis.