Paris wonders how the Fed will eat the markets
Posted 5 Dec. 2022 at 17:42
” Employment figures hard to read… This is the conclusion of the firm Aurel BGC after the publication, Friday, of the official report on American employment. In November, the world’s largest economy created 263,000 jobs, against 200,000 expected, the unemployment rate remained at a historically low level of 3.7%, stable over one month, and the average hourly wage increased by 0.6% over the month, which is double the market estimate. ” The figures remain solid, but their reading in detail shows some signs of weakness », Estimates Aurel BGC.
Among them: construction and industry showed a certain deceleration, which is probably the cause of the destruction of 17,200 jobs in temporary employment in November (after -6,100 in October). ” It is not impossible that employment deteriorates more than expected in these two sectors in the coming months “, according to the firm. In distribution and transport, destruction was also recorded, while e-commerce sales are less dynamic than last year. The ISM services index, released Monday afternoon, confirmed the ongoing tensions in the US labor market. The index remained largely in the expansion zone at 56.5 points in November after 54.4 in October.
Three central banks on the move this week
We would not like to be in the place of American American bankers, as long as the period to be crossed is detestable, between inflation, decline and energy transition to be financed. The Fed’s monetary policy committee meets for two days, December 13 and 14. While there is no doubt that the cost of money will continue to rise, the question is by how much: 50 basis points? 75 basis points? The market returned the probability of a 50 basis point Fed funds rate hike to 74.7%, according to CME Group calculations. And after ? ” The Fed will continue to raise its key rates next year to force a slowdown in the labor marketestimate the Commerzbank teams. It is only when it has achieved this objective that it will interrupt its rate hikes. “, discover the bank, which provides for a terminal rate of at least 5%. The members of the FOMC, who have become accustomed to delivering their analysis, will have to keep their mouths shut, since the blackout period has begun.
In the euro zone, it is too early to talk about a terminal rate, said Monday the governor of the Banque de France, François Villeroy de Galhau. “ We decide, meeting after meeting, what is needed; and we do not steer market rates, which are sometimes excessively volatile. This week, the market will have an appointment with three other major central banks, that of Australia (Tuesday), Canada and India (Wednesday). They should raise their key rates, while adopting a more balanced discourse, while rates are close to, or above, the neutral rate.
In such a context, the Paris market played it safe, especially as activity in the private sector in the euro zone fell for the fifth consecutive month in November. A sign that the approach is rapidly retreating. “ Conditions that could lead to a spike in energy prices in the coming months could not only affect purchasing power but could also affect production capacities in the most energy-intensive industries. Such a scenario would lead to a much more pronounced deterioration in the economic situation “, decrypts Chris Williamson, chief economist at S&P Global.
Asia in better shape
At the close, the About 40 returned to 6,696.96 points, down 0.67%, in a low transaction volume of 2.8 billion euros. across the Atlantic, the Dow Jones loses 0.7% and the Nasdaq Compound 1.1%. The indices did not follow the path traced by the Asian markets. In Hong Kong, the Hang Seng took 4.5% and the CSI 300 of major caps in Shanghai and Shenzhen nearly 2%. The trend benefited from the easing of health restrictions in China. From now on, users of public transport in Shenzhen and Shanghai will no longer have to provide a PCR test, the inhabitants of certain buildings will be able to carry out their quarantine at home in the event of a positive test.
These announcements supported, on the other hand, oil, for its part, gained ground, to more than 88 dollars a barrel of North Sea Brent during the session. Note that it is from today that the price of oil from Russia is capped at $60 a barrel. The objective is clear: to dry up one of Moscow’s main sources of income.
In terms of recommendations, BofA Securities downgraded its opinion on the title of the construction and communication group Bouygues (-2.91%) from “neutral” to “underperforming”, while JPMorgan lowered its recommendation on the automotive supplier plastic omnium (-4.19%) from “neutral” to “underperformance”.
For its part, biotech Valneva it is awarded 3.47%. The company announced positive antibody persistence data twelve months after vaccination with a single dose of its chikungunya vaccine candidate.
Finally, Beneteau soared 16.39%. The recreational boat manufacturer said it could ” exceeding » his results this year and adds having a ” significant advance on its 2020-2025 strategic plan.
PC