The Cac 40 exposed to the risk of an aggressive Fed and new sanctions against Russia, Market News

The Paris stock market is trading at a two-week low, the “hawkish” comments by a US Federal Reserve official raise tensions in the debt market in an atmosphere already weighed down by the war in Ukraine and the specter of new Western sanctions against Moscow.

Half way through the session, the Bedroom 40 decreased by 1.49% to 6,546.32 points on a turnover of 1 billion euros. the contracts future on US indices returns between 0.5% and 0.8%.

The electoral risk also weighs in after a Sopra Steria Cevipof poll The world this Wednesday credit Emmanuel Macron 26.5% of the voting intentions in the first round, against 21.5% for Marine Le Pen, compared to 28% and 17.5%, respectively, in the previous survey conducted March 21-24. That pushed French 10-year OAT yield above 1.2% for the first time since 2015 before coming back around 1.9%.

The yield differential with the German Bund of the same maturity is at its highest point since March 2020 at around 53.5 basis points, putting pressure on banks. BNP ParibasAgricultural credit and Societe Generale loss between 2% and 2.5%. Technology stocks are also affected STMicroelectronics and Worldline yield almost 3%. Plus, Jefferies went from “buy” to “hold” TotalEnergys (-1%) referring to the war in Russia and political risk in France ahead of the first quarter results.

Towards a rapid deleveraging of the Fed’s balance sheet?

The governor of the fed Lael Brainard said on Tuesday that the main task is the fight against inflation, adding that from May the central bank will also have to focus on reducing its balance sheet, and on a ” High speed “, to bring its policy toward” a more neutral attitude ” during the year.

She also called for a half-point increase in federal funds rates next month. † These comments are all the more important because Ms Brainard is usually one of the most ‘dominant’ from FOMCnotes Jeffrey Halley, market analyst at Oanda. If it moves to the superhawks, the market will have to take that into account, and it has.The jar of honey EQ [assouplissement quantitatif] is about to be closed “, he adds. Investors fear that more restrictive policies could lead to a slowdown in the US economy or even a recession. Scheduled for 8 p.m., the publication of the “minutes” of the latest FOMC meeting will only be followed more closely.

Washington is expected to introduce new measures on Wednesday that will ban new investment in Russia. Banks, state-owned companies and certain members of the government are also said to have been targeted, as well as two of ‘s subsidiaries Vladimir Poutine, according to the press and US agencies. The European Union has already announced its intention to halt coal imports and close its ports to Russian ships, without, however, oil-, or natural gas. Key Russian business leaders and oligarchs would also be targeted, according to the Financial times citing a draft EU document.

Klépierre demoted by JPMorgan

LVMH and barrier and Hermes lost 1.7% and 2.8% respectively in response to contraction in service sector activity in China last month. The resumption of the coronavirus epidemic has reduced mobility and weighed on demand, while the incarceration of the city’s 25 million residents Shanghai is extended.

Klepierre down 3.2%. JPMorgan has downgraded the title of the property from ‘neutral’ to ‘underweight’.

Renault yields 1.9%. Moody’s confirmed the group’s creditworthiness at “Ba2” with a negative outlook. The rating agency believes that the suspension of the group’s industrial activities in Russia is a ” setback But it also notes that the €1.1 billion debt of the Russian subsidiary of AvtoVaz would disappear from the balance sheet of the group if the manufacturer decides to cease its operations in Russia.

In the same industry, Stellantis plaice with 4.2% and Faurecia 3.6%, at the same time registering a one-year low.

Conversely, defense value, Thales costs another 1.5%.

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