Cac 40 catches its breath before the Fed’s decision on its interest rates, Market news

The Paris Stock Exchange is catching its breath after recovering the day before, investors are limiting initiatives to the US Federal Reserve’s monetary decision and its details on the pace and scale of the next rate hike, as well as on reducing its balance sheet. letter. The market is also questioning the impact of the European Commission’s proposal to gradually reduce Russian oil imports.

Ursula von der Leyen did invite the European Union this Wednesday, as part of the sixth series of sanctions against Moscow, to consider reducing ordered and the phased process of importing Russian oil given the embargo by the end of the year. A barrel of Brent from the North Sea rose by almost 3%, which won TotalEnergiesincreasing by 1.1%. Technip Energies increases by 2.5%.

Shortly after 2:30 p.m. Bedroom 40 lost 0.53% to 6442.06 points with a business volume of 1.15 billion euros. Contracts future on American indices rose about 0.3%. AMD increased by almost 7% in pre-market trade, thanks to higher-than-expected forecasts for data centers, the most profitable market.

Towards a reduction in the Fed’s balance sheet

The US Federal Reserve is preparing, if not surprised, to announce a Fed rate hike of 50 basis points, the highest since May 2000. The FOMC statement is expected to be at 8 p.m. The US Federal Reserve is expected to raise the Fed’s rate to 0.75% to 1%. He should also point out that he is preparing to reduce his balance sheet, which now stands at about $ 9 trillion, starting in June at a rate of $ 95 billion a month.

During his press conference scheduled for 20:30, the Fed chairman should try to consolidate the expectations of the market, which expects a further increase in rates, while taking care not to lose control, as some FOMC members have asked for an increase of 75 basis points. His statements to the IMF about the need to move faster and more in terms of tightening monetary policy to curb inflation have raised concerns about the scale of the movement that will come at a time when the global economy is beginning to slow down.

On the macroeconomic front, the US private sector created 247,000 jobs in April, according to a survey by ADP Employer Services. The consensus formed by Bloomberg expected 383,000 new jobs after 479,000 in March (revised from 455,000). Small businesses were particularly hard hit, while those with 500 or more employees limited their impact by creating 321,000 jobs.

The ECB is in ambush

The strong upward trend in the US labor market also means that the onslaught of recent real GDP weaknesses should not change the Fed’s plans to step up. The central bank knows that monetary policy will be paralyzed if inflation remains well above its targets. That is why monetary officials will remain focused on fighting inflation in the coming quarters through growth. summed up Ipek Ozcardeska, an analyst at Swissquote, in a note this morning.

The ECB is also not indifferent to rising prices, especially since the eurozone is exposed to tensions over raw materials related to the war in Ukraine. This was reported to the publication by a member of the Central Bank Isabel Schnabel Handelsblattthat it is time to start the fight against inflation and that the rate increase may take place in July. He is thus more offensive than Vice President Luis de Gindos, who said this week that he could step up in July, but said it was unlikely.

In the bond market, the yield on 10-year US bonds fell slightly to 2.9590%, remaining within the 3% threshold reached this week, the highest since the end of 2018. German debt of the same maturity, which serves as a benchmark in the euro area, tends to 0.9770%.

Solvay raises EBITDA forecast

Solvay increased by 6.1%. The chemical group increased its base gross operating surplus (EBITDA) by 2022, achieving record results and significantly exceeding analysts’ expectations in the first quarter. His competitor Archema increases by 2.5%.

Vallourec advance of 2.2%. The manufacturer of seamless pipes has announced the partial resumption of operation of an iron mine located in Pau Branco, Brazil, in agreement with the mining authorities for three months.

Airbus loses 2.1%. The European Aviation Safety Agency may ask the aircraft manufacturer to make changes to the design of the A321 XLR, which could lead to the transfer of certification of the device, according to Reuters. Airbus is due to release quarterly results after closing.

Remy Cointreau areas by 3.3% and Pernod Ricard 2.3%, like other players in the alcoholic beverages sector, after Kepler Chevre’s rating from Italy’s Campari fell from “buy” to “hold” amid heightened fears about rising costs.

EDF decreased by 3.1%. The energy group announced a significant increase in its turnover in the first quarter due to high electricity and gas prices, but recalled that this productivity will have only a “limited” impact on its gross operating surplus (Ebitda), in particular due to declining production.