La Paris took few initiatives this Monday, a fairly “light” day in terms of business results but which was rich in data on inflation in Europe. Operators were not worried about an acceleration in consumer prices in Germany, this was expected by consensus. The CPI index harmonized with European standards increased by 2.4% over one year in April across the Rhine, after an increase of 2.3% the previous month. It is energy that has been one of the main drivers of the small surge in prices.
A similar dynamic was also observed in Spain in the morning, with an acceleration to 3.4% over one year after the government continued to eliminate aid which made it possible to contain the surge in energy costs. Data for the entire euro zone, due on Tuesday, is expected to show an overall figure of 2.4%, unchanged for the first time this year. But there should be a further easing of underlying tensions.
Christine Lagarde, the president of the European Central Bank, warned during the last monetary policy meeting that inflation would fluctuate in the coming months due to base effects. A rebound in inflation, as long as it does not deviate from estimates, should therefore not prevent the ECB from reducing its rates in June, as is widely anticipated. The uncertainty is more about what she will decide next. Franziska Palmas, from ING, considers further relaxations very likely but their extent will depend on the degree of disinflation in services.
At the close, the Cac 40 lost 0.29%, to 8,065.15 points, in a business volume of 2.86 billion euros. In New York, Dow Jones, S&P 500 and Nasdaq Composite are on a symbolic rise.
A hawkish tone expected from the Fed
The main monetary event of the week obviously remains the two-day Fed meeting. It will end on Wednesday, while European markets will be closed for Labor Day. But investors will still follow the statements of the president of the institution, Jerome Powell, regarding the central bank’s rate outlook. And a hawkish tone is more than expected from him with the confirmation of the tenacity of inflation in recent months.
“With all measures of consumer prices showing a sharp acceleration over the past three or four months, the FOMC is bound to reverse its earlier predictions of significant rate easing this year, Societe Generale economists wrote in a note to customers. That said, markets have already significantly reduced their rate cut expectations, so unless Chairman Powell raises the possibility of a hike, the impact on the market should be modest. » A first relaxation is not anticipated before September, compared to June only a few weeks ago, for a little more than 30 basis points of easing in total this year.
The State helps Atos, Philips settles its disputes in the United States
On the business side, Atos rebounded by 19% after the announcement, by the Minister of the Economy yesterday, of a takeover offer made to the IT group so that the State could resume its so-called “sovereign” activities of useful systems. for deterrence, army commands and intelligence services. The daily Les Echos mentions a price ranging from 750 to 900 million euros, according to its sources.
In Amsterdam, Philips took off 28% (+47% at the highest of the session) after an agreement in the United States for 1.1 billion dollars to settle disputes concerning bodily injuries linked to its respirators against the Sleep Apnea. A colossal amount, certainly, but lower than market fears.
Porsche fell just under 3% in Frankfurt after delivering the worst quarterly results since its IPO at the end of September 2022.
