(Paris) Global stock markets rose slightly, with Wall Street maintaining its momentum with hopes that the US Federal Reserve would leave its main interest rate unchanged after the meeting on Wednesday, a first since March 2022.
Wall Street continued its bullish momentum: the Dow Jones gained 0.17%, the S
In Europe, less festive for three weeks, the financial markets ended on a modest rise, offsetting a good part of their decline of the past week. Paris gained 0.52%, Frankfurt 0.93% and London, penalized by commodities, gained only 0.11%.
In the U.S., “we’ve had a turning point,” says Jack Ablin of Cresset Capital, who attributes the pivot to recent indicators that showed the U.S. economy and inflation decelerating, without activity stalling for as much.
“The fear was that inflation was going to stay high and the Fed was going to keep raising rates, undermining corporate profitability and growth,” the analyst said. “But now investors are seeing the light at the end of the tunnel,” namely the imminent end of the monetary tightening cycle and the ebb of inflation.
All investors’ attention is on Tuesday and Wednesday’s US Federal Reserve (Fed) meeting and Thursday’s European Central Bank (ECB) meeting.
The latest consumer price index figures for May in the United States will be scrutinized on Tuesday, in order to gauge the current price dynamics, with inflation still remaining strong in the world’s largest economy.
A surprise in this publication could however change the decision of the institution, estimates Ilana Azuelos-Bossard, manager of Kiplink Finance.
However, even if no new increase in the Fed’s key rates is announced this week, several economists warn that the monetary institution could raise them again at the next meeting, at the end of July.
Later in the week, the European Central Bank and that of Japan also meet. The ECB, which started its cycle of rate hikes later than the Fed, is expected to raise rates again, while signaling that it does not intend to stop there, even if inflation recedes and the euro zone is entered into recession.
The Bank of Japan is expected to maintain the status quo.
The bond market was also not very lively, with sovereign debt interest rates rising slightly, to 2.38% for the German 10-year bond against 2.37% on Friday and 3.77% for the US equivalent versus 3.74%.
After the announcement of the death of the former head of the Italian government Silvio Berlusconi, the title of his group MediaForEurope (MFE, ex-Mediaset) jumped. The “A” share, which gives the right to one vote at the General Meeting of Shareholders, gained 5.86% and the “B” share, which is worth ten votes, 2.32%, against a backdrop of speculation about the company’s future.
Interest rates on Italian government bonds fell more than the rest of European rates. That of ten-year debt was worth 4.05%, against 4.11% at the close on Friday.
Cruise lines took off on Wall Street, buoyed by a rating upgrade from analysts at Bank of America and JPMorgan, buoyed by strong bookings and fares.
Norwegian (8.16%), Carnival (14.01%) and Royal Caribbean (2.19%), the three giants of the sector, pranced.
Oil prices are faltering, investors fearing that a possible Fed rate hike will weigh on economic activity and therefore demand for crude.
Around 12:10 p.m. (Eastern time), a barrel of Brent North Sea, for delivery in August, lost 3.12% to 72.45 dollars. Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in July, yielded 3.56% to 67.67 dollars.
On the currency side, the euro was stable (-0.03%) at $1.0745 per euro.
Bitcoin lost 1.03% to $25,870.