2023-04-19 12:47:17
(Photo: The Canadian Press)
MARKET REVIEWS. Stock markets were weighed down on Wednesday by continued high UK inflation, which opens the door to more key rate hikes, as new corporate results caught investors’ attention amid a slowdown of economic activity.
Stock market indices at 8:30 a.m.
The futures contracts Dow Jones lost 136.00 points (-0.40%) to 33,988.00 points. The futures contracts S&P 500 yielded 26.50 points (-0.63%) to 4,153.50 points. The futures contracts Nasdaq showed a decline of 113.25 points (-0.86%) to 13,079.75 points.
In London, the FTSE 100 yielded 17.03 points (-0.22%) to 7,892.41 points. In Paris, the CAC 40 fell 4.27 points (-0.06%) to 7,529.36 points. In Frankfurt, the DAX posted a decline of 33.58 points (-0.21%) to 15,849.09 points.
In Asia, the Nikkei Tokyo fell 52.07 points (-0.18%) to 28,606.76 points. For his part, the Hang Seng Hong Kong fell 282.75 points (-1.37%) to 20,367.76 points.
On the oil side, the price per barrel of American WTI was down US$1.76 (-2.18%) at US$79.10. The barrel of North Sea Brent fell by US$1.85 (-2.18%) to US$82.92.
The context
Wall Street was preparing to open in the red the day after a session without direction.
Inflation slowed slightly in March in the UK, but remains above 10%, driven by food bills. Its decline is more modest than the forecasts of economists, who expected to see it fall back below the two-digit threshold.
“For the Bank of England, the need to proceed with a further rate hike at its next meeting, and probably beyond, is therefore becoming more pressing”, with “growth which seems to have held up, year in and year out”. year, at the beginning of the year” and “underlying inflation maintained by the acceleration of wages”, concludes Thomas Bauer, economist of the firm RichesFlores.
Core inflation, which excludes energy and food, remained stable at 6.2%. It is this indicator that particularly attracts the attention of central banks.
As a result of this publication, British government bond rates rose significantly: the ten-year rate rose to 3.85% against 3.75% the day before, and the two-year rate stood at 3.78% against 3 .68% Tuesday night.
The Bank of England would not be the only one to raise its rates next month since, according to the consensus, the Federal Reserve and the European Central Bank (ECB) should do the same in their fight against inflation.
Rising prices, which central banks have been tackling for more than a year, remain a concern in food and services, even as headline inflation is decelerating in the United States and the eurozone .
According to experts, the US Federal Reserve, which has raised its key rate by nearly 5 points in one year, the highest level since the early 1980s, should raise its rates by 25 basis points at its next meeting in early May. , approaching the terminal rate of its monetary tightening cycle.
The chief economist of the European Central Bank Philip Lane pleaded for his part Tuesday evening on Bloomberg TV for a new rise in interest rates in May, without specifying the extent.
Sales in Europe boost Heineken
The Dutch brewer Heineken reported on Wednesday a net profit in the first quarter down slightly (3%), to 403 million euros, against 417 million euros last year, but maintains its objectives and reports sales “over beyond expectations” in Europe and “encouraging” in the United States. The action rose 3.40% in Amsterdam.
ASML declines despite rising profit
The Dutch manufacturer of lithography systems for the microprocessor industry ASML posted a net profit of nearly 2 billion euros in the first quarter despite its role in the chip war between the United States and China. The group still expects strong growth for the full year. The action lost 2.36% to 574.90 euros, investors retaining the decline in global demand.
On the side of currencies and oil
The book loses 0.24% against dollar (at US$1.2394) and the euro lost 0.21% against the book at 88.10 pence for one euro.
Oil prices continued to slide on Wednesday as fears of another U.S. rate hike that could weigh on demand for crude overshadowed China’s economic recovery.
The barrel of North Sea Brent for June delivery slid 1.89% to US$83.17.
Its American equivalent, the barrel of West Texas Intermediate (WTI)for May delivery, was down 1.90%, at US$79.32.
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