The Paris Stock Exchange should continue its decline on Wednesday at the opening after already three consecutive sessions of decline, while the euro is still evolving below the threshold of parity with the dollar against a backdrop of high gas prices in Europe.
The CAC 40 futures contract fell by 0.24% around thirty minutes before the opening of the session, and the day before the meeting of central bankers in Jackson Hole (United States) which investors will scrutinize carefully, in search of indices on the future orientations of monetary policies.
The euro was still hovering below the parity threshold with the dollar, the day after a low for almost 20 years. Around 06:30 GMT on Wednesday, the euro was in balance (-0.0026%) against the greenback at 0.9945 dollars.
The US currency remains strong, with the markets now bracing for the US Federal Reserve to continue to tighten monetary policy in the wake of the 75 basis point hike in its key rates in July.
Fed Chairman Jerome Powell is due to speak at around 2:00 p.m. GMT on Friday.
The single currency also suffers from an increasingly gloomy macroeconomic context in Europe. Fears of recession are weighing on the markets, fueled on Tuesday by the publication of a PMI indicator in the euro zone signaling a further contraction in economic activity in the private sector in August.
The Paris and Frankfurt stock exchanges have lost more than 2% since the beginning of the week when no investor wants to take the risk of exposing themselves to an energy crisis in Europe, observes Ipek Ozkardeskaya of Swissquote.
All the competitiveness that can come from a weak euro (favoring exporting companies, Editor’s note) is crushed by the pressure of rising costs due to energy prices and the growing probability of a strong recession on the old continent, explains Ms. Ozkardeskaya.
As gas prices in Europe rise above record highs, investors are increasingly concerned that a hike in key central bank rates, combined with rising energy prices, will push the economy into a long recession, adds Michael Hewson analyst at CMC Markets.
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The Dutch TTF futures contract, the benchmark for the European natural gas market, climbed 2.49% to 275.750 euros per megawatt hour (MWh) around 6:35 GMT.
Values follow on Wednesday
Credit Agricole: The European Central Bank (ECB) on Tuesday imposed a fine of a total of 4.8 million euros on the French bank and two of its subsidiaries for a violation of the rules of declaration of capital, after the cancellation of a first sanction by European justice.
Valneva: the Franco-Austrian biotechnology laboratory announced Tuesday after the stock market that the World Health Organization had published guidelines on the use of its vaccine against Covid-19.
TotalEnergies: the French hydrocarbon giant has announced that its partnership with the oil and gas exploration groups Inpex (Japanese) and Woodside (Australian) has received a license to assess CO2 storage off the northwest coast of Australia.