2023-06-15 12:04:56
(Photo: Getty Images)
MARKET REVIEWS. Stock markets in Europe and the United States on Thursday gloomily welcomed the scenario evoked by the American central bank of two additional rate hikes and are cautious ahead of the meeting of the European Central Bank (ECB).
Stock indices at 8:00 a.m.
Paris slipped 0.4% at the start of the session in Europe, London by 0.1% and Frankfurt of 0.2%.
In New York, before the markets open, the average Dow Jones of industrial stocks and the broader index S&P 500 were down 0.1%.
In Asia, the Nikkei 225 fell less than 0.1% in Tokyo. The scholarship of Shanghai climbed 0.7% and the Hang Seng jumped 2.2% in Hong Kong. Sydney added 0.2% and Seoul lost 0.4%.
On the New York Commodity Exchange, the price of oil took 46 cents US at US$68.73 a barrel.
The context
The US Federal Reserve (Fed) has decided not to raise its key rates, for the first time since March 2022 and following ten consecutive increases, and is giving itself a little more time to observe the evolution of the economy.
But given inflation still high – 4% in May in the United States – Fed Chairman Jerome Powell warned that almost all members of the institution were in favor of a further rate hike.
Fed rate forecasts from various members suggest “two additional rate hikes, which is a surprise” more restrictive than expected by investors, said Vincent Juvyns, strategist at JP Morgan AM.
For Michael Hewson, analyst at CMC Markets, the tone employed by Jerome Powell was aimed at “directing market expectations”. The analyst sees no real justification in the economic data for two more rate hikes.
Investors’ attention is now turning to the European Central Bank which meets on Thursday.
A 0.25 point rise in ECB rates is expected.
The institution’s president, Christine Lagarde, will probably opt for a strict tone and reaffirm “that despite the recent easing of inflationary pressures – and perhaps the deterioration of the economic outlook – the ECB will continue its efforts to combat inflation,” anticipates Ipek Ozkardeskaya, an analyst at Swissquote Bank.
Analysts at Natixis CIB Research will be “particularly attentive to the publication of new projections and comments on inflation which has fallen recently”.
On the bond market, sovereign interest rates rose, particularly European short-term rates, which are the most sensitive to monetary policy expectations. The yield on German two-year debt was worth 3.08%, down from 3% at Wednesday’s close and the US equivalent 4.74%, down from 4.69% on Wednesday.
The risk of raising rates is to threaten growth. Germany, Europe’s largest economy, will post a recession in 2023, weighed down by inflation which is undermining consumption, according to forecasts from two institutes.
In China, the stock markets were galvanized by the announcement of a reduction in a reference interest rate by the Chinese central bank, a measure intended to support the economy, which overshadowed disappointing economic indicators.
Hong Kong climbed 2.17% and Shanghai rose 0.74%.
Asos returns to profitability
The action of the online clothing retailer Asos soared 15% in London following a return to profitability in the third quarter of its staggered 2022/2023 financial year, despite a decline in sales.
The warm way
The Swiss textile group Warm fell 3.44% following issuing a warning on its results for 2023 in the face of a “difficult” consumer climate which is affecting its recent acquisitions, in particular the German start-up Erlich Textil from which it will separate.
Commodities and Currencies
Natural gas prices were climbing, driven since early June by the drop in supplies from Norway, due to leaks and maintenance at many facilities.
The Dutch FTTa benchmark European contract, climbed more than 20% to 46 euros per megawatt hour (MWh), shortly following hitting 47.64 euros per MWh, the highest price since early April.
Oil prices rebound Thursday. The barrel of Brent for August delivery advanced 0.97% to US$73.91 and that of American WTImaturing in July, down 0.85% to US$68.85.
The euro was up 0.13% at US$1.0844.
The bitcoin lost 0.24% to US$24,870.
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