Cac 40 in the red after the resignation of Mario Draghi, the ECB follows, Market news

The Paris stock exchange is losing ground, the resignation of Mario Draghi is paving the way for a political crisis in Italy, the third largest economy in the euro zone. The President of the Republic, Sergio Mattarella, has asked Mario Draghi to manage day-to-day affairs ahead of early parliamentary elections due in October. The resignation came on the same day that the European Central Bank’s Governing Council is set to raise interest rates for the first time since 2011.

Around 11 o’clock in the morning in Bedroom 40 lost 0.39% to 6,160.80 points with a business volume of 600 million euros. in Milan, FTSE Eb decreased by 2.25%.

With inflation in the Eurozone reaching record levels, it is clear that tightening monetary policy is appropriate. But the scale of the movement is questionable as the region faces an energy crisis. 25 basis points or 50 basis points? That’s the question.

The ECB is waiting for TPM

For BlackRock analysts, the ECB faces a real dilemma: ” either inhibit growth or adjust to higher inflation, and this in the context of an energy shock and the stress experienced by the peripheral countries of the Eurozone. As a result, the central bank is likely to choose a 25 basis point hike and will certainly end its rate hike cycle earlier than the Fed, they added.

The famous Fragmentation Protection Mechanism (Transmission Protection Mechanism or TPM) is especially expected, ” The spread between 10-year Transalpine bonds and German bonds of the same maturity has widened since the beginning of the year. Therefore, all attention will be focused on what Christine Lagarde thinks about the latest events in Italy and what she proposes against fragmentation. “, – emphasizes Ipek Ozkardeskaya, Swissquote Bank.

In the bond market, Italy’s 10-year bond yield fell 25 basis points to 3.6140%, its highest level since mid-June, versus 1.3030% for the German Bund, leaving the spread at 230 basis points, a difference of 2.3 %.

Publicis at the head of Cac 40, Thales avoided

Nord Stream 1, which connects Russia to Germany, reopened on Thursday but is expected to operate at only 40% of its capacity, two sources close to Gazprom told Reuters. The resumption of flows to Europe is some relief for the markets, but it will not solve the underlying problem as long as Russia does not hesitate to brandish its gas weapons in the face of European sanctions after the start of the war in Ukraine.

Thales yield 1.2%. Despite this, the defense electronics group raised its full-year forecast for order numbers and revenue growth thanks to strong activity across all segments in the first six months of the year. While she welcomes the solidity of the six-month figures, Chloe Lemarie of Jefferies notes that the increase in forecasts is more ” limited than expected “.

Publicis increased by 4%. The advertising agency raised its overall forecast for 2022 after posting record results and beating analysts’ forecasts in the first half of the year.

self a drop of 12%. Manufacturer of small household appliances aims for turnover » globally stable “and an operating margin of 8% to 8.5% in 2022. The group made these forecasts when its results fell in the first half, and it does not anticipate that.” a significant improvement in the economy by the end of the year in mature countries “.

The first contribution to the decline of Cac 40, TotalEnergies lost 2.4% on higher oil prices as US crude inventories rose by 3.5 million barrels last week, according to data from the American Petroleum Institute (API).