Cac 40 pending ECB decision and Christine Lagarde conference, Market News

The Paris Stock Exchange is closing as the results of the European Central Bank’s Board of Governors approach, whose investors are waiting for clarification on the planned tightening of monetary policy. The press release will be published at 13:45, ahead of Christine Lagarde’s traditional press conference at 14:30. While inflation in the euro area reached a record high of 8.1% for the year in May, markets broadly expect the ECB to raise rates by 75 basis points by October.

mid session, Bedroom 40 lost 0.34% to 6426.72 points on a still limited business volume of 645 million euros. Contracts future American indices added from 0.3% to 0.4%.

The ECB is expected to mark the end of its asset purchase program this month and set the stage for a rate hike in July. Chair Christine Lagarde’s comments on inflation will be watched closely as Michael Hewson, chief market analyst at CMC Markets, recalls in late 2021 that she still believed a rate hike this year was unlikely amid rising consumer prices. reached 4.9% in the euro area as a whole and 6% in Germany.

How to raise the euro?

He also recalls that at the same time Jerome Powell acknowledged that the adjective ” transient no longer fit to describe the course of inflation before the Fed finally halted its asset purchase program until March of this year.

The prospect of ECB tightening just in July will not be enough to strengthen the euro, especially against the dollar, as the market is widely anticipating it, Swissquote’s Ipek Ozkardeskaya said. It remains for her to “evaluate” the question of whether the ECB will choose a 50 bps increase to stop the depreciation of the euro, or a gradual increase. ” A stronger euro is the first step to curb runaway inflation in Europeas well as, at the very least, energy purchases negotiated in dollars would be “cheaper” for Europeans and have a calming effect on consumer prices. “, she adds. In the foreign exchange market, the euro is almost stable at $1.0717.

High price for the global economy

While investors are trying to gauge the size and pace of the next ECB rate hike, they are also waiting for May US inflation data to be released tomorrow. According to the consensus formed by Bloomberg, they should have stabilized at 8.3% during the year. In the bond market, the yield on US 10-year bonds remains above 3% at 3.0224%.

Yesterday, the OECD warned of risks to the global economy that are expected to pay a high price for the war in Ukraine in the form of lower growth, higher inflation and potentially long-term damage to supply chains.

Two options for the nationalization of EDF are being considered

The biggest increase in SRD, EDO increased by 8%. The nationalization of the electrician is one of the priority projects of the new government, which will be implemented after the legislative elections, the report said. Echo. The state, which owns 84% ​​of the group’s capital, is exploring two options: either through a simplified public offer for minority shareholders, or through a nationalization bill, daily points out.

In CAC 40, world line advance payment 2.6%. In a study of the European payments sector, JPMorgan reaffirmed its view of the “revaluation” of the value, while reducing the target price from 72 to 59 euros.

Sodexo receives 1.1%. HSBC upgraded the catering company’s stock from Hold to Buy. The same broker downgraded the rating Elior (-3.1%) from “buy” to “hold” and reduce the target price from 7.50 to 3 euros.

Among other analysts’ comments, Credit Suisse began monitoring Total Energy to “superiority” to strive for 60 euros. The action of the oil group is 0.4%.

get the link fell 3.1% despite a tripling in passenger traffic in May. RBC maintains its “undervalued” view of the stock, believing that the volatile aspect of gaining market share does not favor the upside of results or their current valuation, which is “significantly” overvalued by speculative M&A deals.