(Paris) The President of the American central bank Jerome Powell cooled the European and American stock markets on Wednesday by reaffirming the will of the Fed to raise its rates further.
In Europe, Paris lost 0.46%, Frankfurt 0.55%. London fell 0.13%, limiting the damage, thanks to a rise in oil stocks, after higher than expected inflation figures. Only Milan gained 0.12%, supported by its banking stocks.
Wall Street indices opened lower. THE
The NASDAQ even fell 1.17%, taking a breather after its strong gains of the past few weeks. These are notably the values of the giants Amazon (-0.82%), Alphabet (-1.77%) and semiconductor manufacturers, such as Nvidia (-2.97%) and AMD (-4.78%) , which weighed down the index.
“Jerome Powell reiterated that the Fed expects to raise rates further in the coming months and that there is still a long way to go to get back to a 2% [inflation] target,” says Michael Hewson, CMC Markets analyst.
He also felt that this rate hike could come “at a more moderate pace.”
These statements are broadly in line with his speech last week and “investors are no further ahead than this on the duration of the rate hike pause” after this hearing, according to Konstantin Oldenburger, for CMC Markets.
“We feel that investors are hesitant and cautious,” adds Lucas Excoffier, head of continental brokerage at Oddo BHF.
In the bond market, yields on US debt rose slightly. That of the 10-year bond was worth 3.78% around 12 p.m. EST, down from 3.72% at the previous day’s close.
Those of the European countries reacted less strongly, except for the interest rates of the British debt which hardly tolerate a stagnation of inflation in the United Kingdom in May, at 8.7% over one year, while investors expected to a slowdown.
“The Bank of England is expected to hike rates again tomorrow, with some suggesting we could see a 50 basis point hike, instead of the 25 basis points currently expected,” warns Hewson.
In response, interest rates on UK bonds rose, especially the two-year maturity, the most sensitive to monetary policy expectations, which reached a high since July 2008, at 5.11%. By 12 p.m. EST, it was 5.02%, down from 4.92% at the previous day’s close. The ten-year rate was 4.40%.
FedEx, the American letter and parcel delivery group, announced Tuesday evening that its quarterly turnover had fallen more than expected and forecasts at best a small increase in sales for the coming months.
Its stock lost 0.86% on Wall Street.
In its wake UPS yielded 1.34% and in Frankfurt Deutsche Post lost 2.60%.
Oil prices were rising. At 12:05 p.m. (Eastern time), a barrel of Brent North Sea took 1.66% to 77.16 dollars and its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery the same month, which is the first day of use as a benchmark contract, gained 1.94% to 72.57 dollars.
The shares of TotalEnergies (2.73%), BP (2.21%) and Shell (1.81%) rose in their wake.
The euro rose 0.30% to $1.0951.
Bitcoin was up sharply, 5.95% to $29,845, after renewed investor interest in cryptoassets. The stock of cryptocurrency exchange Coinbase rose 1.07% in New York.