The ECB has mobilized in the face of rapid rates, the market appreciates … pending the Fed’s decision, market news

Investors have long noted the date of June 15 as the date of the Federal Reserve’s decision on monetary policy. They did not know that the European Central Bank (ECB) would also convene. At the meeting urgently decided to discuss ” current market conditions “.

Meeting for a small amount?

Faced with the rapid cost of government debt, which raises concerns about the debt crisis, especially in peripheral countries leading in Italy, the monetary institution chaired by Christine Lagarde organized an exceptional meeting … which was announced at the last meeting, June 9. The reinvestment of the PEPP (Pandemic Plan) will potentially be used to support spreads (profitability spreads) between euro area countries, and the ECB has confirmed that it is working on the instrument. advertisement hoc antifragmentation to combat the constant and unjustified increase in rates of return. ” It is likely that this new tool will be announced in July, when it will be able to raise key rates for the first time since 2011. “Says Ulrike Castens, European economist at DWS.

There is a lot of noise from nothing and trust that is not growinglaunches Frank Dixmeier, responsible for bond management at Allianz Global Investors. Insufficient in its ability to raise rates without hindrance due to the negative impact of tighter monetary conditions on the countries with the weakest public finances (primarily Italy), the ECB seems to be losing focus.. ยป

In the stock market, this still had little effect. in Bedroom 40 accelerated to 1.35% to 6030.13 points, completing six consecutive sessions of decline. The volume of operations is almost 3.9 billion euros. In Milan FTSE Eb rose by 2.9%. In the secondary debt market, the yield on Italian 10-year bonds, which this week exceeded 4% for the first time since 2014, in the midst of the debt crisis, fell to 3.82%, resulting in spread with Germany at 2.17% compared to more than 2.4% on Tuesday.

75 basis points

On the other side of the Atlantic, it’s time to rebound Dow Jones, S & P500 and Nasdaq Composite increasing from 0.5% to 1.7% within a few hours after the Fed’s verdict. What will be the attitude of the US Federal Reserve in the face of rapid inflation, which accelerated to 8.6% in May in one year? If you are sure that the rates Fed funds will grow further, it remains to be seen how much: 50 basis points, 75 basis points, 100 basis points? More scenarios do not seem to be possible, even if the FedWatch CME Group’s barometer analyzes the market betting almost 95% on raising interest rates by three quarters. Fed fundsin the new range of 1.50% to 1.75%, which would be the largest increase since 1994.

The ECB is mobilizing in the face of rapid rates, the market appreciates ... pending the Fed's decision

The ECB is mobilizing in the face of rapid rates, the market appreciates ... pending the Fed's decision
The ECB is mobilizing in the face of rapid rates, the market appreciates … pending the decision of the Fed | Photo: CMEgroup

If the Fed surprises with an increase of 50 basis points, the market will undoubtedly choose to weaken. But the Fed’s main goal is to curb inflation now, not stimulate stock markets. And depressed stock markets seem necessary to achieve this goal. Now that the market has swallowed a 75-point increase pill, it would be irrational for the Fed not to continue raising more. “, Analyzes Ipek Ozcardeska from Swissquote.

Well-targeted jars and luxury

As for values, banks have raised their chances. BNP Paribas, Societe Generale and Agricultural credit ranged from 2.01% to 2.86%. Luxury stocks resumed after better-than-expected activity in China, one of the main markets for the sector. thus, Caring scored 2.58%, also helped by the recommendation of Jeffries. The American broker raised its opinion on “hold” to “buy”, while lowering the target price from 695 to 605 euros.

In addition to Cac 40, EDF increased by 3.43%. ” All options on the table As for the future electrician, 84% state-controlled, French Economy and Finance Minister Bruno Le Mer told BFM TV when asked about the group’s possible nationalization.

Fauretia won 4.96%. Stifel analysts note that after overcoming the obstacle to capital growth associated with the acquisition of Hella, investors will be able to focus on disposal. The broker “buys” for shares. And vice versa, Athos loses another 5.2%, the day after the fall of 23%.