Cac 40: The Paris stock market moves forward after the Fed and ECB announcements

(BFM Bourse) – The CAC 40 rose sharply mid-session as equity markets cashed in well on the still restrictive statements from the two major central banks.

The air pocket is a priori very temporary for the Paris stock exchange. After losing 0.5% on Thursday, the CAC 40 is moving forward this Friday, gaining 0.8% mid-session. Over the week as a whole, the index is currently up 1.9%.

Stock markets do not deviate from their optimism. This despite the announcements from the Federal Reserve (Fed) and the European Central Bank (ECB). The first marked a break in its rate hike cycle on Wednesday night, but its chairman, Jerome Powell, made it clear that further rate hikes were being considered by members of the central bank.

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Central banks “on combat mode”

For its part, the ECB, as expected by the market, continued to raise its key interest rates by 25 basis points or 0.25%. But here the European institution again emphasized the persistence of inflation, and its president, Christine Lagarde, declared that the ECB still had some way to go on this point. The central banker has indicated that its members plan to raise interest rates further at the next meeting in July.

“The Fed and ECB remain in inflation-fighting mode, indicating they are poised to raise interest rates more than expected this summer on fears that inflation will remain too high for longer. didn’t impress equity markets, this led to interest rate markets be even more cautious. The US and German yield curves are back at the inversion level before the banking shock in mid-March, which is not a good sign for the economic cycle”, comments Xavier Chapard from LBPAM.

In terms of values, the Orpea share takes 6% and gained around 40% in three sessions, a movement that is difficult to explain, but perhaps due to the positioning of certain private investors who play an adjustment of the restructuring plan.

For its part, LDLC fell 6.7% after publishing results for the full financial year 2022-2023, significantly and below TP ICAP Midcap’s expectations.

In the other markets, the euro is stable against the dollar at 1.0948 dollars. Oil prices are losing some ground. The North Sea’s Brent contract for August delivery fell 0.6% to $75.23 a barrel. barrel, while the July contract for New York-listed WTI fell 0.7% to $70.09 a barrel. barrel.

Julien Marion – ©2023 BFM Bourse

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