After a weekly gain of 1.7%, the Paris Stock Exchange is preparing to start a week that will be dominated by inflation and the first results of American companies for the second quarter. The risk of new containment measures in China should also weigh on the trend.
Stronger-than-expected US jobs data in June reflected the resilience of the US economy, but bolstered expectations of a 75 basis point Fed rate hike at the end of the month. month. According to the evolution of the contracts future on Fed funds, this probability is estimated at 100% by the market, while that of a more significant tightening is evaluated at 7%. As a result, the yield on the 10-year US bond rose back above 3% and was trading at 3.0860% in Asia this morning, as were the 2- and 5-year maturities.
The Fed will get tougher
Investors will particularly follow, on Wednesday, the evolution of consumer prices in the United States in June, which should have accelerated to 8.8% over one year, a new peak of 40 years, after 8.6% in May . The inflation expectations component of the University of Michigan consumer confidence survey, closely watched by the Fed, will also be scrutinized.
A more aggressive Fed, combined with fears of recession, particularly in Europe, are supporting the US currency, which continues to strengthen against the single currency. The latter is struggling to stay around 1.0140 dollars after hitting a 20-year low at 1.0072 on Friday, a stone’s throw from parity.
The second-quarter earnings season kicks off on Thursday with the accounts of major U.S. banks like JPMorgan, Morgan Stanley, Citigroup and Wells Fargo. Overall earnings per share for S&P 500 companies are expected to rise 5.7% year on year in the three months to the end of June, according to data compiled by I/B/S Refinitiv, while estimates for the third and fourth quarters were revised slightly downwards.
A semiconductor factory in France
With the exception of Tokyo, the Asian markets were in the red this morning, with declines of more than 2% in the Chinese CSI 300 and more than 3% in the Hang Seng in Hong. In question, the emergence of a new variant of Covid 19, the Omicron BA 5.2.1, spotted in Shanghai, which raises fears of new confinements
STMicroelectronics and GlobalFoundries announced the creation of a new semiconductor factory in France. The two groups declare that it is an investment of several billion euros which will benefit from the support of the State, without specifying the exact amount.
Sanofi reported positive data from a phase III study of fitusiran prophylaxis in adults and adolescents with severe hemophilia A or B. The group also announced that a pivotal Phase III study of efanesoctocog prophylaxis has met its primary endpoint in patients with severe haemophilia A.
Airbus announced that it delivered 295 aircraft over the first six months of the year and won 259 net orders over the period.
Among analysts’ ratings, JPMorgan has raised its recommendation on EDF from “underweight” to “overweight”.