Cac 40 looks forward to ECB ‘fragmentation’ announcement pending Fed decision, market news

The Paris Stock Exchange is recovering, along with other European markets, after the announcement of an unscheduled meeting of the ECB’s Board of Governors to discuss current market conditions. The decision came after Italian 10-year bond yields topped the 4% mark this week for the first time since 2014, rekindling fears of fragmentation in the eurozone. The 10-year BTP yield fell 23 basis points to 3.93%. Banks BNP Paribas, Agricultural loan as well as Societe Generale earn from 2% to 3%.

Just before 10 o’clock in the morning Bedroom 40 increased by 0.93% to 6,003.45 points with a business volume of 450 million euros.

The recent surge in so-called periphery bond yields follows the absence of any specific announcement from the ECB on new instruments to avoid fragmentation within the eurozone. So the market is speculating on the decision to protect the weaker economies. Last Thursday, the ECB announced it was halting asset purchases at the end of the month and raising key key rates by 25 basis points at its July meeting.

The market is also wondering about the extent of the next monetary increase from the Fed, whose decision is expected tonight, with fears that too heavy a hand could lead to a recession.

After a 50 basis point increase late last week, expectations have risen in light of an unexpected surge in inflation, which is now the highest since late 1981 in the United States. The market is expecting a 75 basis point increase, which would be unprecedented since 1994, or even 100 basis points.

We previously expected Fed rates to peak in the range of 3.25% to 3.5% in the first half of next year. This forecast is clearly underestimated, and now the peak may be closer to 4%. But we’ll wait to see new economic forecasts from the Fed and dot charts. [graphique en points illustrant les anticipations du FOMC en matière de taux d’intérêt] until these predictions are confirmed says Paul Ashworth of Capital Economics.

The yield curve inversion continues, with 2-year US bond yields hovering around 3.3% after hitting 3.456%, the highest level since 2007, while the 10-year yield is trading at 3.41% this morning. As US Treasury bills serve as the global benchmark, financial conditions are tightening across the planet, putting strong pressure on consumer purchasing power, especially in developing countries that borrow in dollars.

All options open to EDF

EDI rises by 3.4%. ” All options on the table” when it comes to the future electrician84% is controlled by the state, French Economy and Finance Minister Bruno Le Maire said on BFM TV when asked about the possible nationalization of the group.

Luxury stocks are rebounding after reporting better-than-expected performance in China, one of the sector’s main markets. Kering especially gaining 2.4%. Jefferies raised its rating on parent company Gucci to Buy from Hold while cutting its price target from €695 to €605.

Airbus rise in price by 1% and Saffron 1.2% following a positive aerospace rating from Berenberg, which sees “clearer skies on the horizon” for aerospace and defense demand.