The Paris Bourse expected to rise sharply after the Fed – 12/16/2021 at 8:21 am
The Paris Bourse should open sharply higher Thursday, satisfied with the visibility given by the US Federal Reserve and the speech given by its president Jerome Powell on Wednesday evening.
The futures contract of the flagship CAC 40 index took 1.60% forty minutes before the opening of the session. On Wednesday, it finished up 0.47% to 6,927.63 points, ending a streak of five declines.
Main event of the end of the year, the meeting of the monetary committee of the US Federal Reserve ended Wednesday evening. Nervous and falling before Mr. Powell’s speech, US markets ended sharply higher, with the Dow Jones taking 1.08% and Nasdaq 2.15%.
In Asia, enthusiasm also followed, Tokyo taking 2.13%.
Faced with galloping inflation, the institution acted “as expected”, said Michael Hewson, analyst at CMC Markets. She decided to take it up a notch by moving forward a few months to the end of the reduction in asset purchases, from June to March.
When purchases are brought down to zero, “there shouldn’t be any need (…) for a long time” before the first rate hike, said Jerome Powell, without giving more details. The markets are now betting on “three rate hikes in 2022, as in 2023,” notes Hewson.
The Fed therefore showed the markets that it was taking the fight against inflation into account, removing the reference to its provisional nature, which had until then been in effect.
The Fed boss, however, insisted on the need to show adaptability, given the many uncertainties.
Among these, the economic impacts of potential health measures to combat the Omicron variant.
Investors are still preparing for a long day, marked by the meeting of the governors of the European Central Bank (ECB), and the speech of its president Christine Lagarde in the afternoon.
The ECB is also expected to take inflation into account, even if the pressure is a little weaker than in the United States. It must also specify the evolution of its asset buyback measures, its special program to respond to the pandemic (“PEPP”) ending in March.
The ECB should “join the Fed and also enter a new phase,” said Carsten Brzeski, economist at ING. “That of risk management, after that of massive monetary support.”
The Bank of England is also holding its monetary policy meeting on Thursday.
Among the values to follow Thursday
EDF will start shutting down as a precaution from Thursday the two reactors at the Chooz nuclear power plant in the Ardennes to check for possible faults on its emergency cooling circuit, after the detection of faults in another power station of the same model.
Vivendi: the Italian operator Telecom Italia (TIM), of which the French group is the largest shareholder, launched a new profit warning on Wednesday evening, linked to revenues below expectations of its agreement with the DAZN platform, the “Netflix” of the live sport.
fs / pn / nth