Paris: in the red after inflation in the euro zone

POINT MARCHÉS-Repli en vue en Europe à la veille de l'inflation US (actualisé)

(CercleFinance.com) – The Paris Stock Exchange starts the session lower after a new burst of statistics that may influence the next monetary policy decisions. The CAC40 index fell 0.9% to 6,154 points.

This last session of the month is punctuated by numerous publications of macroeconomic indicators, including the first estimate of inflation in the euro zone in August.

The annual inflation rate of the euro zone is estimated at 9.1% in August 2022, with slight acceleration due to 8.9% in July, according to a rapid estimate published by Eurostat, the statistical office of the European Union.

Like yesterday in Germany, these figures show a new acceleration in consumer prices in the region and further fuel the debate on rate hikes, the dominant factor at the moment.

In France, according to the provisional estimate made by INSEE at the end of the month, consumer prices in France should increase by 5.8% in August 2022, thus marking a slight slowdown after +6.1% in the previous month.

In the second quarter of 2022, France’s GDP in volume terms rebounded by 0.5% quarter-on-quarter (after -0.2% in the first quarter of 2022), according to detailed data from INSEE, thus confirming its first estimate.

“Recent speeches do not suggest an imminent break in the adjustment cycle”, recall the Oddo BHF teams in a recent note.

For private banking, the ECB meeting scheduled for next week should end with a 50 basis point hike, even if the assumption of a 75 point hike seems to be tightening the ropes.

In the US, the estimated probability of a 75 basis point rate hike now stands at 62.5%, according to CME Group’s FedWatch barometer, following yesterday’s strong Conference Board sentiment index.

“This positive economic news has boosted investor confidence that the Fed will continue to raise rates in 2023,” analysts at Deutsche Bank said.

After yesterday’s rise, the 10-year US Treasury yield is stabilizing a bit this morning, around 3.11%, versus 3.14% last night.

In Europe, the 10-year German Bund yield also fell to 1.50% from 1.54% yesterday. Its French equivalent, at 2.12%, is also falling.

In the foreign exchange market, the euro continues to recover above parity against the dollar, at 1.003 against the dollar, in view of the normalization of the ECB’s policy.

The only good news this morning, China’s manufacturing purchasing managers’ index PMI stood at 49.4 in August, down from 49 in July, according to data from the State Bureau of Statistics.

‘Despite the impacts of Covid-19 and heat waves, the Chinese economy has maintained its recovery,’ greeted the BES.

On the securities side, TotalEnergies announces the start, on September 1, of its massive fuel price reduction program in France, a program that affects nearly 3,500 service stations. Thus, the price of oil-derived fuels sold at stations will drop by 20 euro cents per liter from September 1 to October 31, and then by 10 cents from November 1 to December 31 with respect to the prices formed in international market prices.

Airbus announces that Dominik Asam, its Chief Financial Officer (CFO), has decided to leave the company in early March 2023 after nearly four years in the role, to pursue a new opportunity as CFO of software company SAP.

bioMérieux indicates that it is slightly raising its sales growth targets, between -6% and -3% organic, and the contributory current operating result, between 580 and 625 million euros. In the first half of 2022, the French in vitro diagnostics specialist saw its net income fall, the group’s share by 18% to €228 million, and its contributing ROC settle by 15% to €322 million, i.e. , a margin of 19.4%

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