Cac 40: The Bank of England is heading towards rate cuts, the CAC 40 continues a fifth increase

Cac 40: The Bank of England is heading towards rate cuts, the CAC 40 continues a fifth increase
Cac 40: The Bank of England is heading towards rate cuts, the CAC 40 continues a fifth increase

(BFM Bourse) – The Parisian index ended again sharply higher this Thursday, while the governor of the Bank of England clearly indicated that his institution would lower its rates soon.

Public holidays seem to bring good luck to the Paris Stock Exchange. After gaining 0.7% on Wednesday May 8, the CAC 40 ended up 0.69% this Ascension Thursday, at 8,187.65 points.

The Paris market turned around late in the morning shortly before the Bank of England’s monetary policy decision which may have accelerated the trend.

The British central bank kept rates unchanged. However, the institution is clearly heading towards a decline in the coming months. “With the progress made in ensuring that inflation remains around 2% (…) it is likely that we will need to lower rates in the coming quarters and make monetary policy less restrictive, perhaps more than expected by the market,” Bank of England Governor Andrew Bailey said at a press conference, according to comments reported by AFP.

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Stellantis and Renault on the rise

Investors also took note of new weekly jobless claims in the United States, which were higher than expected. They stood at 231,000 units when economists surveyed by the Wall Street Journal expected 214,000 registrations. Enough to reinforce the expectations of the market which has recently started to hope that the American Federal Reserve (Fed) will lower its rates by 0.5 percentage points this year.

On the value side, Stellantis has regained some color (+2.2%) after having suffered greatly in recent sessions. Renault, for its part, gained 0.9% following the results of its Japanese ally Nissan, whose operating profit forecast for the current financial year exceeded expectations.

Conversely, Accor lost 2.4%, while Airbnb, which operates in a comparable market segment, froze Wall Street. The American group’s shares lost 6% shortly before the European close, while the company delivered a disappointing revenue forecast for the second quarter.

On other markets, the euro gained 0.2% against the dollar to 1.0776 dollars. Oil is moving forward a little. The July contract on North Sea Brent rose 0.3% to $83.84 per barrel while the June contract on WTI listed in New York gained 0.4% to $79.31 per barrel.

Julien Marion – ©2024 BFM Bourse

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