The Paris Stock Exchange ended slightly down 0.09% on Wednesday, marking a decline after a surprise hike in the main key rate of the central bank of Canada, ahead of the meeting of the American Federal Reserve (Fed).
The star index CAC 40 lch 6.21 points to finish 7,202.79 points. The day before, the Parisian place had grabbed 0.11% 7,209.00 points.
We have markets that have performed very well since the beginning of the year and it is logical that they are a little down today while we await the outlook for monetary policies in the coming months, explains Vincent Juvyns, member of the strategy team at JPMorgan AM.
The American Federal Reserve is holding a meeting on June 13 and 14 to decide on its monetary policy and a possible increase in its key rates in June. The officials of the European Central Bank will meet again on June 15.
But today, the markets were surprised by the increase in the Bank of Canada’s main key rate, by 0.25 points, which reached a high since May 2001 of 4.75%, while this bank was there three months later the first major central bank to pause its hikes.
The monetary institution had many reasons to restart its tightening cycle today but we thought the Bank of Canada would wait until July to do so, acknowledged Josh Nye, analyst for Royal Bank of Canada, in a note. .
A new rise announced on July 12 is likely, given that it is difficult to predict a slowdown, added this expert.
With the approach of the Fed meeting, many analysts believe that the US monetary institution will pause in June after ten consecutive rate hikes.
However, the key information for the markets is that most of the upside is done anyway and they are looking at the trajectory beyond July, Mr. Juvyns continued.
On the bond market, the interest of the French 10-year loan was 3.00% against 2.91% at the close the day before.
Apart from the central banks, the markets are keeping an eye on China, but the economic recovery of the second world power is happening more gradually than expected, underlines the analyst.
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In detail, China’s exports, a historically key driver of growth for the country, plunged in May for the first time since February.
Exports contracted in May by 7.5% year on year, a much more pronounced decline than analysts had expected (-1.8%).
Stellantis continues on its way
Automaker Stellantis gained 1.45% to 14.95 euros after announcing on Wednesday the launch of the second tranche, worth 500 million euros, of its share buyback program totaling 1.5 billion euros, announced on February 22. The group had already completed a first installment of the same amount.
The transaction will close no later than Sept. 7 and the repurchased shares will be cancelled, according to a statement.