2023-05-04 06:33:19
Handover this Thursday between the US Federal Reserve, which left the door open for a next break, and the European Central Bank, where the question does not arise. The ECB should proceed on Thursday with its seventh consecutive rate hike, the only, relative, unknown, relates to the magnitude of this turn of the screw.
25 basis points or 50 basis points, bets are off as inflation reaccelerated in April in the euro zone to return to 7% over one year. However, in “core” data, particularly monitored by the central bank, the rise in prices marked its first slowdown in 10 months, falling from 5.7% to 5.6%.
The ECB lags behind other central banks
Most analysts expect the deposit rate to rise 25 basis points to 3.25%. However, some economists point to the tightening of credit conditions, an inflation rate still well above the 2% target, as well as rising wages so as not to rule out a 50 basis point rise. This is particularly the case with economists at Goldman Sachs, for whom a quarter-point increase is not acquired ».
« The ECB is already well behind other central banks in its rate hike cycle and yesterday the unemployment rate in the eurozone fell to a new all-time low of 6.5% recalls Michael Hewson of CMC Markets. He adds that ” this might result in a more aggressive stance today and a 50 basis point hike on the premise that it is better to do too much when it comes to inflation than not enough. This is certainly Germany’s point of view, and it is not in the minority, so how Christine Lagarde will navigate this maze will be instructive during her press conference. ».
PacWest Bancorp in turmoil
During her previous post-Board of Governors press conference, Christine Lagarde described the banking crisis as specific to the United States. She should not fail to be questioned on the subject this Thursday following the takeover of First Republic Bank by JPMorgan Chase and the fall of more than 60% of PacWest Bancorp in following-market transactions in New York this night while the bank is studying several options, including putting it up for sale.
The US Federal Reserve announced last night a 25 basis point hike in the Fed funds rate. Notably, the Fed removed from its statement the reference to the need for further rate hikes, demonstrating that the central bank has taken into account the recent evolution of credit conditions. Its chairman Jerome Powell has hinted that a pause in the monetary tightening cycle might come in June, while ruling out the prospect of monetary easing this year.
But for Andrew Hunter of Capital Economics, the latest “ Fed statement is the clearest sign that Wednesday’s 25 basis point hike is likely to be the last. We expect economic weakness and a stronger-than-expected decline in core inflation to convince policymakers to start cutting rates once more later this year. ».
ArcelorMittal does better than expected, Airbus confirms
ArcelorMittal reported quarterly profit growth on the back of rebounding demand, which boosted steel prices. The gross operating surplus stood at 1.82 billion dollars, once morest 1.66 billion expected.
Veoliaconfirmed its forecast for 2023, following strong growth in its results in the first quarter, fueled in particular by the rise in energy prices. The group of utilities still expects organic growth of its gross operating surplus (EBITDA) of 5% to 7% this year. It is also counting on a “solid organic growth” of its turnover as well as on a net current result in progression, around 1.3 billion euros.
Legrandmaintained its 2023 targets following posting sharply higher results in the first quarter. Over the first three months of the year, Legrand’s net profit amounted to 330.5 million euros, compared to 258.3 million euros in the first quarter of 2022, an increase of 28%. Adjusted operating profit reached 477.2 million euros, up 19% year-on-year. This shows an adjusted operating margin of 22.2%, compared to 20.3% in the first quarter of 2022. Revenue rose by 7.4% on an organic basis, to 2.15 billion euros.
Get hold of it is confident in its ability to achieve its objectives for 2023, following an increase in its turnover in the first quarter. Over the period from January to March, the group’s turnover amounted to 5.73 billion euros, up 10.9% year on year in published data. At constant exchange rates, revenues increased by 10.7%. According to a consensus established by FactSet, analysts anticipated on average revenues of 5.62 billion euros for the first quarter.
Airbus. The aircraft manufacturer’s activity contracted in the first quarter due to persistent supply problems, in particular engines, but Airbus nevertheless confirmed its forecasts for the whole of the year.
Among analyst ratings, Morgan Stanley downgraded Teleperformance from “overweight” to “weighted”, while Bernstein did the same on L’Oreal.
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