The Paris Stock Exchange is posting a second session of decline in a row. This Wednesday, the Cac 40 closed down 0.69%, at 7,609.15 points, at the end of a calm session. Investors are certainly dreading the publication, on Friday, of PCE inflation figures for the United States and the first round, on Sunday, of the legislative elections in France.
Three quarters of the Cac 40 components finished in the red. ArcelorMittal, Unibail-Rodamco-Westfield, Renault, Bouygues and Airbus lost more than 2%. The European planemaker remains under pressure after lowering its delivery target this year due to ongoing supply problems.
Conversely, Eurofins Scientific (+3.3%) continued its rebound after denying the allegations of financial embezzlement brought against it by the Muddy Waters fund which caused it to lose more than 16% on Monday on the stock market.
Towards a rate hike in August in Australia?
We will have to wait until the last session of the week to have a real catalyst with the publication of the Federal Reserve’s preferred American inflation index. Annual growth in the underlying PCE index is expected to slow to 2.6% in May, the lowest rate in more than three years. “Barring further shocks to energy markets and/or supply chains, the coming slowdown in inflation and the rebalancing of the labor market will allow the data-dependent Fed to implement up to two monetary easings this year.”hopes Selena Ling, head of research and strategy at OCBC Bank.
Fed Governor Michelle Bowman, known for her restrictive positions, is less confident. For her, there are still a number of upside risks to the inflation outlook (geopolitics, persistent tensions in the labor market, possible fiscal measures, etc.) and she does not see any rate cuts arriving soon. Words that make American bond yields tense.
In Australia, the monthly consumer price index rose at an annual rate of 4% in May, up from 3.6% in April and well above market forecasts of 3.8%. The Australian central bank may have to raise rates in August.
For the European Central Bank, investors’ expectations of two additional relaxations this year are reasonable, believes Olli Rehn, member of the Governing Council.
