The Paris Stock Exchange rebounded cautiously on Wednesday morning, welcoming the holding of an exceptional meeting of the European Central Bank (ECB) which restored tone to banking stocks before a monetary decision by the American central bank (Fed).
At 11:15 a.m., the CAC 40 index regained 0.81% to 5,998.08 points after six sessions of decline.
Some investors are bargain-hunting after the recent drop in the indices. They could say that the acceleration of the monetary normalization of the Fed dreads this evening, that is to say an increase of the rates of 75 basis points, is from now on integrated in the courses, observes Franklin Pichard, director of Kiplink Finance.
The Fed’s monetary committee is due to unveil the extent of its additional monetary tightening to tame inflation on Wednesday at 6:00 p.m. GMT, a decision to be followed by a much-anticipated press conference by Fed chief Jerome Powell.
The option of a 50bp hike hasn’t completely disappeared from the radar, but speculation of a 75bp hike has swelled in recent days following the release of an acceleration in US consumer prices in May. .
Another market catalyst, the European Central Bank announced an exceptional meeting on Wednesday morning, a week after announcing a tightening of its monetary policy to fight inflation which was accompanied by an increased gap in borrowing costs between the euro zone states.
The imminence of this surprise meeting relaxed the sovereign debt market in the euro zone, which supported the equity market. The Italian ten-year bond rate fell more than 20 basis points to 3.95% after having exceeded 4% since the start of the week.
The ECB seems to be stealing the show a little from the Fed today but the US central bank remains the major market event, believes Neil Wilson, analyst at markets.com.
According to him, the ECB should simply tell the markets that it is working on a new tool/plan to deal with the risk of financial fragmentation in the euro zone.
Rates on the public debts of countries considered to be fragile have recently risen much more than German rates and this gap has accelerated after the ECB announced last week its intention to begin a cycle of rate hikes in July. its key rates to fight inflation.
ECB officials have repeatedly hammered in recent weeks that they are ready to intervene urgently if the risk of fragmentation in the sovereign debt market increases, but many observers have bemoaned the lack of a solution. concrete presented by the institution.
On the securities side, financials regained momentum after having suffered a lot at the start of the week: Axa rose by 2.93% to 23.06 euros, Crédit Agricole by 2.62%, BNP Paribas by 2.24% and Socit Gnrale by 2 .07% around 11:13 a.m.
EDF took 1.86% 8.31 euros. A renationalisation of EDF to enable it to build new nuclear reactors has not yet been decided, but it is not excluded, indicated on Tuesday the Minister for Energy Transition Agns Pannier-Runacher.