Cac 40 awaits ECB decision and Christine Lagarde conference, market news

The Paris Stock Exchange is reluctant to approach the results of the Governing Council of the European Central Bank, whose investors are waiting for clarification on the planned strengthening of monetary policy. A press release will be released at 1:45 p.m. before the traditional Christine Lagarde press conference at 2:30 p.m. While inflation in the eurozone reached a record 8.1% for the year in May, markets generally expect ECB rates to rise by 75 basis points by October.

Mid-session, Bedroom 40 lost 0.34% to 6426.72 points with a still limited business volume of 645 million euros. Contracts future on American indices rose from 0.3% to 0.4%.

The ECB is expected to complete its asset purchase program this month and pave the way for a rate hike in July. President Christine Lagarde’s comments on inflation will be closely monitored because, according to Michael Hugson, chief market analyst at CMC Markets, in late 2021, she still believed that this year’s rate hike was unlikely amid rising consumer prices. reached 4.9% in the euro area as a whole and 6% in Germany.

How to raise the euro?

He also recalls that at the same time Jerome Powell acknowledged that the adjective ” transitional was no longer suitable for describing the course of inflation until it finally discontinued the Fed’s asset purchase program by March of this year.

One prospect of strengthening the ECB’s monetary policy in July will not be enough to raise the euro, especially against the dollar, as this is widely expected by the market, said Ipek Ozcardeska of Swissquote. It remains to be seen whether the ECB will choose a 50 basis point increase to halt the depreciation of the euro or a consistent increase. ” The strengthening of the euro is the first step towards controlling inflation in Europeand, if nothing else, energy purchases discussed in dollars would be “cheaper” for Europeans and would have a calming effect on consumer prices. “She adds. In the foreign exchange market, the euro is almost stable at $ 1.0717.

High price for the world economy

As investors try to assess the scale and pace of the ECB’s next rate hike, they are also awaiting May inflation data from the United States, which will be released tomorrow. According to the consensus formed by Bloomberg, they were to stabilize at 8.3% within one year. In the bond market, the yield on 10-year US bonds remains above 3% at 3.0224%.

The OECD warned yesterday about the risks to the global economy that are expected pay a high price for the war in Ukraine in the form of lower growth, higher inflation and potentially long-term damage to supply chains.

Two options for EDF nationalization are being explored

The largest increase in SRD, EDF increased by 8%. The nationalization of electricians is one of the new government’s priority projects after the parliamentary elections. Echoes. The state, which owns 84% ​​of the group’s capital, is exploring two options: either through a simplified public offer for minority shareholders, or through a nationalization bill, the diary said.

Under CAC 40, World line advance of 2.6%. In a study of the European payments sector, JPMorgan reaffirmed its view of the “value advantage” while lowering the target price from 72 to 59 euros.

Sodexo an increase of 1.1%. HSBC has raised its recommendation on shares of the catering group from “hold” to “buy”. The same broker lowered the rating Elior (-3.1%) from “buy” to “hold” and reduced the target price from 7.50 to 3 euros.

Among other analysts, Credit Suisse began monitoring TotalEnergies to “exceed” to strive for 60 euros. The action of the oil group is 0.4%.

get links fell by 3.1%, despite a threefold increase in passenger traffic in May. RBC holds its “bad” view of the stock, believing that the volatile aspect of increasing market share is not an argument in favor of rising results or its current valuation, which is “significantly” overestimated by speculation about mergers and acquisitions.