(Paris) Global market players have their eyes on the US central bank, which will announce at 2 p.m. (Eastern time) its decision whether or not to raise its key rates, perhaps for the last time, while the oil prices fall.
European stock markets rebounded the day after a session clearly in the red. Paris gained 0.28%, Frankfurt 0.56%, London 0.20% and Milan 0.77%.
The Wall Street indices are oscillating close to their level the day before. Around 12 p.m. (Eastern time), the Dow Jones was stable (-0.01%), the tech-heavy NASDAQ index gained 0.33% and the broader S index
Investors are expecting a further moderate hike in the main interest rate from the US Central Bank (Fed), by a quarter of a percentage point, as in March, while hoping to hear more dovish messages for the coming months.
The Fed will announce its decision in a press release at 2 p.m. EST, followed by a press conference by Fed Chairman Jerome Powell a half-hour later.
For Valérie Rizk, economist at Hugau Gestion, the Fed’s rates are “ very close to the peak, even the peak ” that they can reach as part of the monetary institution’s fight against inflation.
“ The Federal Reserve is caught between two fires, on the one hand the fight against inflation and maintaining employment and on the other hand preserving financial stability ”.
The bankruptcies of three US regional banks have shaken market confidence in the US financial system and could encourage the Fed to be less severe.
Several American politicians, including senators Bernie Sanders and Elizabeth Warren, called on the Fed boss in a letter to halt his rate hikes, saying that the accumulation of increases made for more than a year was making the American economy “ more vulnerable to an overreaction from the Fed ”, indicated the financial information agency Bloomberg.
Fears of a global recession and worries about the American banking sector also caused oil prices to fall on Wednesday, with WTI slipping below the 70 dollar mark, a first since the end of March.
Around 12 p.m. EST, a barrel of West Texas Intermediate (WTI), for June delivery, was down 5.09% at $67.99.
Its European equivalent, a barrel of Brent from the North Sea for delivery in July, lost 3.86%, to 72.44 dollars.
Thursday will be the turn of the European Central Bank to meet. It should also raise its rates, for the seventh consecutive time.
The bond market was also adopting a wait-and-see attitude. US bond yields were down slightly, European government yields were fairly flat around 11:55 a.m. EST.
The pharmaceutical group Eli Lilly climbed 5.09% in New York after increasing its annual projections despite falling sales, betting in particular on favorable exchange effects with the weakening of the dollar.
In addition, one of its treatments has been shown in a large clinical trial to slow cognitive decline linked to Alzheimer’s disease.
In its wake, Merck KGaA took 3.14% in Frankfurt and Sartorius 5.23%. In Paris Sanofi rose by 0.76% and GSK by 1.06% in London.
On the other hand, the consumer care giant Haleon, born last year from a split with the British pharmaceutical company GSK, fell 3.43% in London, after quarterly results deemed disappointing and statements from Pfizer.
The cosmetics group Estée Lauder plunged 16.64% on Wall Street after missing the target for its quarterly net profit and lowering its annual forecast.
The semiconductor manufacturer AMD (-8.50%) paid forecasts considered disappointing for the second quarter, due to the slowdown in demand in certain market segments, despite results above expectations in the first quarter.
The dollar retreated against most currencies around 11:55 a.m. EST. It lost 0.47% against the euro at 1.105 1 dollar for one euro. It dropped 0.93% against the yen, at 135.28 yen to the dollar.
Bitcoin fell 1.27% to $28,330.