The Palais Brongniart, former headquarters of the Paris Stock Exchange. (photo credit: / L. Grassin)
(CercleFinance.com) – The Paris Bourse is expected to rise on Thursday morning, in the wake of Wall Street’s rise the day before following a 75 basis point hike in Fed rates which does not seem to have destabilized the market .
Around 8:15 a.m., the ‘futures’ contract on the CAC 40 index – August delivery – climbed 45.5 points to 6302.5 points, signaling a gain of around 0.7% at the opening.
In a statement released last night after its two-day monetary policy meeting, the Federal Reserve announced its intention to raise rates for a fourth straight time.
The central bank also hinted that it could decide on more by the end of the year, depending on forthcoming economic data.
‘Its chairman, Jerome Powell, has made it clear that the fight against inflation remains a priority, even at the cost of a possible entry into recession’, underline analysts at Commerzbank.
But the central authority’s announcements came in very much in line with market expectations, causing investors to pay heightened attention to the language used regarding the recent slowdown in economic growth.
As such, many economists expect the Fed to take more cautious measures as its monetary policy becomes more restrictive.
‘The subtle changes in the FOMC statement as well as President Powell’s comments during the press conference reinforce our expectation that by September the Fed will raise rates at a less aggressive pace’, assure Lombard Odier’s teams.
The Swiss private bank says it is planning a further increase of 50 basis points at the end of the September meeting, followed by increases of 25 basis points at subsequent meetings.
The New York Stock Exchange also managed to end on a largely positive note after the announcements of the Federal Reserve, the Dow Jones having advanced by 1.4% and the Nasdaq Composite by 4.1%.
Beyond the unsurprising decisions of the Fed, it is the large number of company results that will represent the major news of today’s session.
Stakeholders are preparing for a particularly busy day on the front of quarterly publications, many European heavyweights of the caliber of ArcelorMittal, Nestlé, Sanofi, Stellantis or Volkswagen having already unveiled their accounts in the early morning.
The session also promises to be very rich in terms of economic indicators, with in particular the latest inflation figures in Germany, expected to be almost stable at a very high historical level.
Market participants will also be interested in the first estimate of second-quarter US GDP, expected to rise 0.5% after its 1.6% decline in the first quarter.
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