(Paris) World markets are waiting with some assurance for the conclusion of the American central bank on its rates, hoping that a pause in its monetary tightening campaign will be announced for the next few months.
The European indices technically rebounded the day after a session clearly in the red. Paris rose by 0.79%, Frankfurt by 0.75%, London by 0.24% and Milan by 1.21% around 6:30 a.m. (Eastern time).
Wall Street was trending slightly higher before opening the day after a session at half mast, fueled by fears of recession and the return of tensions on certain American regional banks.
Investors are expecting another moderate hike in the US central bank’s main interest rate, 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.
“Fed Chairman Jerome Powell is likely to signal a pause in June to assess the cumulative effect of monetary policy tightening to date, while leaving the door open for further rate hikes in the future. , as Australia was able to do for example,” said François Rimeu, strategist at La Française AM.
According to the financial news agency Bloomberg, several American politicians, including senators Bernie Sanders and Elizabeth Warren, called in a letter on the head of the Fed to halt his rate hikes, considering that the cumulative increases for over a year had made the US economy “more vulnerable to an over-reaction from the Fed”.
On Thursday, the European Central Bank is also expected to raise rates for the seventh straight time.
She “finds herself faced with a complicated situation. Inflation, which is still too high, is falling only too slowly and would require a continuation of a restrictive monetary policy. But on the other hand, the European economy is showing signs of a slowdown which must be watched,” said Emmanuel Auboyneau, associate manager of Amplegest.
In this uncertain context, yields on US and European bonds fell on the secondary sovereign debt market, a sign that investors are looking to protect themselves with assets deemed less risky.
Italy’s second-largest bank UniCredit (4.83% as of 6:10 a.m. EST) raised its full-year forecast, after increasing net profit more than sevenfold in the first quarter, under effect of rising interest rates.
BNP Paribas arrogated 0.75% after recording a record net profit of 4.4 billion euros in the first quarter.
British bank Lloyds (-3.07%) posted a sharp rise in first quarter profit thanks to income from interest rates, which rose sharply year on year with soaring inflation.
European airline giant Lufthansa said on Wednesday it was confident in the continued recovery for 2023, predicting a “boom” in travel demand this summer, after reducing its net loss in the first quarter. The stock, however, was down 2.90% in Frankfurt around 6 a.m. EST.
The title Porsche won 0.26% after the announcement of a 25.5% increase in its turnover to 10.10 billion euros, better than the analyst consensus which was counting on 9, 9 billion. The automaker confirmed its guidance for the year.
Oil prices fell again on fears of a global recession and the US banking sector, with WTI slipping below $70 for the first time since late March.
Around 6 a.m. EST, a barrel of West Texas Intermediate (WTI), for June delivery, fell 2.44% to $69.92.
Its European equivalent, a barrel of Brent from the North Sea for delivery in July, lost 2.03%, to 73.80 dollars.
The dollar stabilized against the single currency, at 1.1038 dollars for one euro. It dropped 0.65% against the yen, at 135.65 yen to the dollar.
