The Paris stock exchange managed to make up for Monday’s losses yesterday thanks to a sharp drop in oil prices at the end of the session. But that trend is set to reverse this morning when June inflation figures are expected in the United States. In Germany last month, consumer prices were confirmed to have risen by 8.2% year-on-year.
On Wall Street, the S&P 500 and Nasdaq Composite fell nearly 1% on Tuesday after a volatile session, but fears of slowing growth and an aggressive monetary policy stance again prevailed. The International Monetary Fund also revised its forecast for US economic growth to 2.3% this year from the 2.9% estimated in June.
The US Department of Labor will release last month’s consumer price statistics at 2:30 p.m. They were expected to rise 8.8% year-on-year, a new 40-year high, after 8.6% in May. Some analysts, including UBS, go as far as predicting a 9% rise, largely due to a surge in gasoline and used vehicle prices.
75 or 100 basis points?
Several U.S. Federal Reserve officials recently called for a 75-basis-point hike in the Fed’s interest rate in July in an attempt to curb inflation after the same hike the previous month. But a higher-than-expected figure could boost expectations for a 100 basis point hike.
” A further rise in consumer prices today will undoubtedly boost Fed hawks, push the dollar higher and stocks lower.– says Opek Ozkardeskaya, an analyst at Swissquote Bank. On the other hand, a weaker-than-expected reading could revive hopes of a soft landing for the U.S. economy and lead to a welcome pause in the dollar’s rise and thus a recovery in stocks ahead of major shocks. U.S. banks do not release their quarterly results on Thursday. However, she adds that in both cases, market volatility should remain high and visibility limited, especially if the summer weakness in trading volumes is factored into the mix “.
In the foreign exchange market, the euro-dollar edged closer to parity at 1.00005 before a jump in the single currency, which is trading around $1.0030 this morning. But a drop below $1, which would be the first since 2002, is only a matter of time, which is a real concern for the European Central Bank as the price of energy and other commodities rises, thus fueling inflation.
Strategic partnership between Renault and Vitesco
In Asia, the central banks of Korea and New Zealand this morning raised their interest rates by 50 basis points to 2.25% and 2.5% respectively. However, there is good news from China: exports rose 13.2% year-on-year in the first half of the year, while imports rose 4.8%. Better-than-expected performance, which may temporarily ease fears of a slowdown caused by the risk of new health restrictions.
Renault announced the signing of a strategic partnership agreement with the German company Vitesco Technologies for the purpose of developing power electronics in the motorization of electric and hybrid vehicles.
Among the analyst notes, Jeffries began to highlight Veralia to “buy” aim at 37 euros. Barclays raised its recommendation Amundi from “line weight” to “overweight”, while lowering the price target from €77 to €70.