2023-09-21 16:10:05
Paris (awp/afp) – World markets showed signs of tension on Thursday after a series of monetary decisions which suggest that key rates will remain high for longer than expected.
Wall Street has been in red since the opening. Around 3:55 p.m. GMT, the Dow Jones fell 0.47%, the Nasdaq index 1.20% and the broader S&P 500 index 1.01%.
In Europe, Paris lost 1.59%, Frankfurt 1.33% and Milan 1.78%. In Zurich, the SMI fell 0.62%.
London held up a little better (-0.69%) after the announcement by the Bank of England (BoE) of a status quo on its key rates, which remain at 5.25%, a surprise and a first break since the start of its cycle of rate increases launched in December 2021.
The announcement, however, had a “mixed effect on the market” which calls into question the credibility of the BoE, underlines Anne Beaudu, bond manager at Amundi.
In response, the pound fell 0.37% to $1.2298 around 3:50 p.m. GMT and reached a new low in more than five months.
On Wednesday, the most powerful central bank, the American Federal Reserve (Fed), decided to maintain its rates at their current level.
Given the reaffirmed objective of bringing inflation back towards 2% and “in a context where the price of oil is on the rise again, Jérôme Powell (the president of the Fed, Editor’s note) suggested that an increase in rate was still possible by the end of the year”, underlines Aurélien Buffault, director of bond management at Delubac AM.
The Fed also warned that after 2023 its rates should fall less quickly than expected until now because growth in the United States this year should be twice as strong as its expectations in June.
Elsewhere in the world, the Swiss central bank also left its rates unchanged on Thursday, while the central banks of Sweden and Norway raised their rates by 0.25 percentage points.
“We are almost everywhere at the same stage: close to the end of the monetary cycle but with uncertainties as to the need for one or two additional rate increases and how long rates will remain this high,” comments Anne Beaudu .
On the bond market, the yield on government bonds has reached its highest levels in several years. The 10-year US rate reached its highest since 2007 and was hovering around 4.47% around 3:50 p.m. GMT while the two-year maturity reached its highest since 2006 (5.14%).
The German 10-year equivalent stood at 2.74% compared to 2.70%, after its highest since 2011.
Luxury in slow motion ___
The luxury sector appears in bright red on Thursday, penalized in particular by a note from Oddo BHF which observes a “slowdown affecting all players”.
Oddo BHF analysts believe in particular that their expectations for Hermès and Moncler were too high and have lowered their recommendation. Their shares lost 5.85% in Paris and 2.15% in Milan respectively.
LVMH fell 1%, Burberry 1.91% and Salvatore Ferragamo 2.50%.
Arm perd pied ___
After the euphoria of the first day of trading, the weather is clouding over for the British microprocessor designer Arm, which lost 4.59% around 3:45 p.m. GMT in New York at $50.47, below its IPO price in Purse ($51). Since the close of its first session, Arm has fallen 18% and lost more than $11 billion in market valuation.
Russian oil restrictions ___
Oil prices have started to rise again after a slight respite since Tuesday.
Around 3:45 p.m. GMT, a barrel of Brent from the North Sea, for delivery in November, rose 0.17% to $93.69. Its American equivalent, the barrel of West Texas Intermediate (WTI), for delivery the same month, which is the first day of use as a reference contract, increased by 0.68% to $90.29.
The Russian government announced export restrictions on gasoline and diesel, adding to nervousness in an already tense oil market due to voluntary production cuts by Saudi Arabia and Russia.
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