Cac 40 in the red after Mario Draghi’s resignation, ECB follows him, Market news

The Paris Stock Exchange is losing ground as Mario Draghi’s resignation paves the way for a political crisis in Italy, the third largest economy in the eurozone. President of the Republic Sergio Mattarella has asked Mario Draghi to manage day-to-day affairs until early legislative elections due in October. The resignation comes on the same day that the European Central Bank’s Board of Governors is set to raise interest rates for the first time since 2011.

Around 11 o’clock in the morning 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%.

Given the record level of inflation in the euro area, it is clear that monetary tightening is necessary. But the scale of the movement raises questions, as the region is prone to an energy crisis. 25 points or 50 basis points? That is the question.

ECB expected at TPM

For BlackRock analysts, the ECB faces a real dilemma: either slow down growth or adapt to higher inflation, and this is in the face of an energy shock and the stress suffered by the peripheral countries of the eurozone. As a result, the central bank is likely to choose a 25 basis point hike and certainly stop the rate hike cycle ahead of the Fed, they add.

The famous anti-fragmentation mechanism (transmission protection mechanism or TPM) is especially expected.” The spread between 10-year Transalpine bonds and German bonds with the same maturity has widened since the beginning of the year. So all eyes will be on what Christine Lagarde thinks about the latest developments in Italy and what she proposes against fragmentation. ”, emphasizes Ipek Ozkardeskaya from Swissquote Bank.

In the bond market, the yield on Italian 10-year bonds fell 25 basis points to 3.6140%, the highest level since mid-June, compared to 1.3030% on German bonds, resulting in a spread of 230 basis points, i.e. . the difference is 2.3%.

Publicis at the head of Cac 40, Thales avoided

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

Thales gives 1.2%. However, the defense electronics group raised its full-year forecast for orders and revenue growth, thanks to strong activity across all of its segments during the first six months of the year. Chloe Lemary of Jefferies applauds the solidity of the half-year results, noting that the increase in forecasts is more “ limited than expected “.

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

Seb 12% drop. Small appliance maker seeks turnover globally stable “and operating margin of activity from 8% to 8.5% in 2022. The group set these forecasts when its results fell in the first half of the year, and this is not what it expects.” significant improvement in the state of the economy by the end of the year in developed countries “.

The first factor in the decline of Cac 40, Total Energy U.S. crude oil inventories surged 3.5 million barrels last week, losing 2.4% as a result of rising oil prices, according to the American Petroleum Institute (API).