(BFM Bourse) – The Paris Stock Exchange is up more than 1% by midday. Equity markets are on the right track ahead of the afternoon release of German inflation figures for August and US consumer confidence again for the current month. Other indicators are also on the program in the United States.
The CAC 40 is ending its losing streak. The flagship index of the Parisian square revives and rebounds 1.2% on Tuesday to 6,296 points at around 12:30 p.m. On Monday it had lost 0.83% after falling 3.41% the previous week to record its worst weekly performance in two months.
The previous day, the US indices had lost ground, with investors remaining on guard after the Jackson Hole meeting that took place at the end of last week. The president of the Federal Reserve (Fed), Jerome Powell, showed this Friday his firmness in the fight against inflation, which has led market operators to raise their expectations in the face of the next monetary tightening by the US central bank.
Market stimulus inflation
Inflation continues to dominate the stock market debates, since investors will know this data in Germany for the month of August at 2:30 pm. Price developments in the euro zone’s largest economy will be closely watched, while July inflation still peaked at 8.5% last month on an annual basis. The consensus expects a further increase to 8.8% for the current month.
The evolution of prices in Germany will give some clues about the next monetary policy decision of the European Central Bank (ECB). Over the weekend, several members of the European institution took the floor to advocate a sharp rise in interest rates at the September meeting. Among them, Martins Kazaks, governor of the central bank of Latvia, a country where inflation exceeds 20%, estimated that the discussion should be between raising rates by 50 basis points (0.5 percentage points) or 75 basis points. The ECB’s chief economist, Philip Lane, was more cautious on Monday. The Irishman thus advocated a “regular rhythm” of climbs that is neither too slow nor too fast.
In Spain, the figures are already known and show a slight slowdown in the pace of price increases on the other side of the Pyrenees. In August, inflation stood at 10.3% year-on-year compared to 10.7% in July. Excluding volatile items (energy and food), prices nonetheless rose 6.4% year over year after rising 6.1% the previous month.
Poxel and Afyren side animation
On the equity front, Sanofi gains 1% as the US Food and Drug Administration (FDA) agreed to grant priority review to its biologic license application for efanesoctocog alfa (co-developed with Sobi) for the treatment of hemophilia A .
Orpea rose on the stock market (+2.4%) after committing to repay certain public aid received unduly.
Carrefour for its part returns 1.2%, penalized by a deterioration of JP Morgan that now goes to neutral compared to the previous outperformance.
On the small- and mid-cap side, Poxel takes 8.5% while the biotech announced on Tuesday the first positive results from the phase II study evaluating its drug candidate PXL065 to treat “soda sickness.”
Afyren appreciates 6%, the Clermont “greentech” has just announced the signing of strategic contracts with two players in the cosmetic and nutraceutical market.
The euro, meanwhile, is gaining ground against the dollar, rising 0.4% to $1.0042 in anticipation of a tougher tone from the European Central Bank on its key rates. Oil contracts are turning lower after their sharp rise on Monday. The October Brent North Sea contract yields 2.35% at $102.64. The Nymex-traded light sweet crude (WTI) contract for the same expiration fell 1.5% to $95.54 a barrel.
Sabrina Sadgui – ©2022 BFM Bourse
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