In fact, there was no suspense. To curb galloping inflation, the European Central Bank (ECB), imitating its American, British and Canadian counterparts, raised its key rate for the first time in eleven years on Thursday. And even after 22 years, given that the monetary institution opted for a higher-than-expected 50 basis point increase, rather than the 25 basis point market expected. ” The Governing Council saw fit to take a larger first step towards normalizing interest rates than indicated at its previous meeting. “, justifies the currency institution in its press release, fell at 14:15. From now on, interest rates on the main refinancing operations, margin credit line and deposit line will be increased to 0.50%, 0.75% and 0.00% respectively from July 27th.
This more severe tightening had little effect on the market, which took it as a sign that a compromise had been reached on a tool designed to combat the risk of fragmentation of eurozone funding conditions. ” Board of Governors Approves New Powertrain Protection Tool (IPT), indeed indicated the ECB in its press release. This is good news at a time when Italy, the third largest economy in the eurozone, is once again in the grip of political instability following the resignation of Council President Mario Draghi. However, the latter will remain in office until the October elections to speed up current affairs. ” IPT was passed unanimously ECB President Christine Lagarde said. This is a necessary condition for his success. Purchases made under the TPI will be unlimited (which is attractive to the markets) and will take place in the event of ” unwanted and erratic market dynamics “. “ What exactly this means remains an open question. said Paul Diggle, chief forecasting and analysis economist at abrdn. For example, is the recent expansion of Italian spreads due to the collapse of the Draghi government unwanted and disorderly, or is it a fair reflection of heightened risks? » In Italy, the flagship index of the Milan Stock Exchange, FTSE Ebcut its losses severely, ending down 0.95% from -2.92% at the day’s low, but in the bond market, the 10-year rate widened its spread to 248.1 base points on German bonds of the same maturity before bouncing back to 236 at the end of the session.
In Paris Bedroom 40 fluctuated to close a small rise of 0.27%, to 6,201.11 points, with a trading volume of 3.25 billion euros. Investors are wondering about the continuation and timing of the next rate hike. When asked about this, Christine Lagarde replied that ” taking into account today’s decision […] the forecast for September is no longer applicable. Everything will depend on the following economic indicators. On the foreign exchange market, the euro peaked at 1.0278 against the dollar before falling to 1.0186.
Publicis and Ipsos surrounded
In terms of values, Publicis leads the Cac 40 with a 5.05% gain. In the second quarter, the advertising heavyweight clearly outperformed financial analysts’ expectations, delivering 10.3% organic growth. The dollar’s strength remains favorable for the group, which raised its forecasts for the year. It now targets 6% to 7% organic growth from the previous 4%-5% range and an operating margin of 17.5%-18% from about 17.5% previously.
Taking advantage of the favorable context for research and opinion polls, ipsos said it was confident in its ability to deliver organic growth of more than 5% this year and reach operating margin levels comparable to last year’s, i.e. 12.9%. In the stock market, the title gained 4.08%. Biopharmaceutical Industry Supplier Shares of Sartorius Stedim also rose (+8.27%) after updating annual targets.
Seb, it’s less good
Vice versa, Seb drank a cup, down 10.18%, in last position in the SRD. The small appliance group revised its full-year guidance after publishing lower-than-expected half-year results. The group is affected by the slowdown in consumption in Europe amid purchasing power concerns.
Also mistreated, biotech Valneva fell 4.27% after the European Commission placed a small order for just 1.25 million doses of its Covid vaccine.