The Paris Stock Exchange should continue in the green on Wednesday, May 11, pending the American consumer price index, inflation being a major issue for the markets because of its consideration in the choice of monetary policy. The futures contract for the CAC 40 index rose by 0.80% around forty minutes before the opening of the session, the day after a technical rebound of 0.51% following four consecutive sessions in the red. The New York Stock Exchange, for its part, ended in disarray on Tuesday, May 10, deprived of a real rebound after statements, considered aggressive, by an official of the American Federal Reserve (Fed).
European indices are expected to open slightly higher on Wednesday morning awaiting the release of US inflation figures for April which could indicate that the peak (of inflation) may be behind us. However, a figure above 8.5% could cause investors to fall back into their tracks and the indices to lower annual levels. The first estimate of the consumer price index in the United States in April is expected in the afternoon as US President Joe Biden assured Tuesday that “inflation (was) his biggest national priority” , as rising prices weigh on US households and its popularity ahead of the midterm elections.
Fed rate hikes expected
Economists expect lower inflation for April after a level not seen since the early 1980s the month before. “It will be painful. But it shouldn’t fundamentally change the trajectory of US monetary policy,” said Christopher Dembik, director of macroeconomic research at Saxo Bank. To curb inflation, the Fed raised its main policy rate by a quarter of a percentage point in mid-March, then by an additional half a percentage point on May 4, the first tightening of this magnitude since 2000. Other increases of half a percentage point could occur during the next two meetings, in mid-June and at the end of July.
On Tuesday, the Fed’s New York branch chair, John Williams, said the institution should raise rates “rapidly” by the end of the year and the Cleveland branch chair of the Federal Reserve, Loretta Mester, even said she was open to raising the key rate by 0.75 percentage points. Inflation, which has been sending cold sweats to all markets for months, accelerated more than expected in China in April, where the consumer price index rose 2.1% year on year. against 1.5% a month earlier.
Values to follow
Alstom: the group recorded a net loss of 581 million euros in its staggered 2021/22 financial year, penalized by an impairment of its stake in the Russian railway manufacturer Transmashholding and accounting losses linked to the acquisition, in early 2021, of Bombardier Transportation.
Eiffage: the construction giant saw its activity grow strongly in the first quarter, in works as well as in concessions, particularly motorways. Its turnover increased by 10%, to 4.37 billion euros.
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