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Market review. Stock markets welcomed Wednesday’s impromptu European Central Bank meeting on market conditions, awaiting a clear signal from the US Federal Reserve on a key rate hike in the evening.
European indices were recovering after six straight declines and a recovery was also forming on Wall Street, with futures on major indexes advancing.
Stock indices at 7:58 a.m.
In the United States, futures contracts daw Jones It rose by 144.00 points (+0.47%) to 30,519.00 points. Futures Standard & Poor’s 500 It recorded an increase of 24.75 points (+0.66%) to 3,761.50 points. Futures Nasdaq It rose by 102.75 points (+0.91%) to 11,417.00 points.
in London , FTSE index 100 It recorded an increase of 92.68 points (+1.29%) to 7280.14 points. In Paris , kak 40 It rose by 65.71 points (+10%) to 6015.55 points. In Frankfurt, the DAX index rose 167.56 points (+1.26%) to 13,471.95 points.
In Asia , Nikki Tokyo shares fell 303.70 points (-1.14%) to 26,326.16 points. For his part, the Hang Seng Hong Kong shares rose 240.22 points (+1.14%) to 21,308.21 points.
On the oil side, the price per barrel of West Texas Intermediate American It fell 0.82 USD (-0.69%) to 118.11 USD. barrel Brent from the North Sea It fell 0.63 USD (-0.52%) to 120.54 USD.
Context
The European Central Bank, which must ensure that it completes the normalization of its monetary policy without causing a debt crisis in the eurozone, organized a surprise meeting of the Board of Governors amid the gap in the debt market between the German reference rate and the countries rate. Southern Europe, the most indebted, is a concern.
Interest rates on these countries’ public debt have recently risen much more than German rates. Moreover, this gap has continued to widen since last week when the European Central Bank announced the end of asset purchases on July 1 and raised interest rates to fight inflation.
The issue of Italian public debt sustainability has re-emerged in the context of rising interest rates and slowing growth.
The ECB has not said if it intends to reach out after this meeting and investors are wondering what avenues the institution could explore.
But the mere fact that this meeting took place “was a wind of relief for many investors,” who “welcomed the ECB’s desire to maintain stability in credit markets, before withdrawing stimulus measures in the eurozone,” says Pierre Ferret, an analyst at ActivTrades.
At the same time, the market is also awaiting announcements of monetary policy tightening from the US Federal Reserve in the evening, which is a major event this week.
The option for a 50 basis point hike hasn’t completely gone off the radar, but speculation for a 75 basis point or even 100 basis point hike has inflated in recent days following the publication of an acceleration in US consumer price inflation in May. .
Depending on the choice, “markets have to react very violently, up and down,” warns John Blassard, investment specialist at Mirabud.
confirms Alexandre Paradis, head of market analysis at IG France.
Stock indexes have streaked badly in recent days and the bond market has also suffered a correction, victim of massive decoupling on fears that tightening financial conditions will trigger a recession in the world’s largest economy.
But with the European Central Bank meeting, the sovereign debt market frankly eased: at around 7:20 a.m. Quebec time, the Italian 10-year maturity yield (at 3.80%) fell below the 4% threshold, a level that was crossed on Monday and back to the end. from 2013.
The extraordinary meeting of the European Central Bank revitalized banking stocks and the euro. The increase was particularly strong in Italy with Intesa Sao Paulo (+5.99%) and UniCredit (+4.66%). In Paris, attributed to him agricultural He got 3.35%, BNP Paribas 2.83% and association General 3.37% at 7:30 am.
The euro rose 0.62% to $1.0480.
Oil prices fell on Wednesday ahead of the long-awaited monetary policy decision from the Federal Reserve (Fed) and the state of US commercial reserves, despite the release of more upbeat data on global demand for black gold.