Against the tide of other financial markets, the Paris stock market grabbed a few points on Monday. +0.12% for the Bedroom 40at 6,555.81 points, helped by a 5% jump from Societe Generale, where the US markets and the Euro Stoxx 50 and Stoxx Europe 600 indices are falling. But the Paris session was characterized by high volatility, with a Cac 40 losing 0.7% before gaining to 1%. Macron’s comfortable lead eases tension for second round of votingsays Moritz Paysen, currency and exchange rate advisor at Berenberg, quoted by Reuters.
Although some relief was felt after the first round of the French presidential elections, the markets nevertheless remained nervous and focused on inflation and the prospect of a tightening of monetary policy in the euro area. fed as a result of the tensions on raw material prices caused by the war in Ukraine†
Banks and defense in support
In Paris, the banks are surrounded thanks to the slight narrowing of interest rate spreads between the French 10-year OAT and the German Bund of the same maturity, which peaked at almost seven years. Societe Generale signed the best performance of the Cac 40 announcing an agreement to sell its stake in the Russian bank Rosbank and its insurance subsidiaries† Including financial stocks, BNP Paribas valued by almost 2%, Agricultural credit and the insurer axa also distinguished themselves. The financial sector could benefit in the short term from a rebound in relief thanks to Emmanuel Macron’s initiatives to strengthen European integration,
highway concessionaires vinci and Eiffage also closed higher, following their decline last week when Marine Le Pen proposes to renationalise the highways.
Defense values were also sought after Emmanuel Macron’s lead in the first round, with the far-right candidate taking a stance in favor of France’s withdrawal from NATO’s unified command. Dassault Aviation won 6% and Thales up 2.5%.
A second round that remains open
A victory for Marine Le Pen, anti-European and allegedly pro-Putin, cannot be completely ruled out as recent polls Emmanuel Macron of an advance limited to two weeks of the second round. The record of the voters’ votes of Jean-Luc Melenchon, who broke the 20% mark in the first round, will be crucial. The insurgent France’s candidate certainly urged his voters not to vote for Marine le Pen, but he did not call for Emmanuel Macron to vote.
Therefore, the market should not be overconfident, as the chance of a victory for Marine Le Pen “is far from zero”, said Xavier Chapard, strategist at Banque Postale Asset Management. For Jessica Hinds, of Capital Economics, the final outcome will depend heavily on the second-round campaign. “It was between the two rounds that Marine Le Pen really lost the 2017 election by highlighting the Frexit and because of a disastrous televised debate against Macron. This time it will be different. The momentum remains on the side of Marine Le Pen and the priority given to the purchasing power theme gives her a head start for this year’s televised debate, scheduled for April 20.
Inflation, again and again
The nervousness on the Paris stock exchange is accentuated by the expectation of Thursday’s meeting of the board of directors of the European Central Bank† Inflation remains a concern and monetary policy is widely expected to become more aggressive, be it an early end to the asset purchase program or the temptation to raise interest rates. While there is disagreement within the Board of Governors, consensus appears to be emerging on the need for an impending rate hike.
Inflation, it will also be a matter of UNITED STATES with the release on Tuesday of consumer price statistics for March. They could post an 8.4% year-on-year increase, according to the consensus formed by Bloomberg, which would be the first pass above the 8% bar since June 1982.
The situation in Ukraine also continues to haunt the markets, and in particular the issue of sanctions against Russian hydrocarbons. Austrian Chancellor Karl Nehammer will meet Vladimir Poutine next Monday, while the foreign ministers of the European Union are meeting in Luxembourg, but there is little chance of reaching an agreement in favor of an embargo on the oil- and Russian gas. the barrel of Brent of the North Sea is down 3% to $99 today, while the city Shanghai stay locked up. The price of oil has been falling for more than two weeks, a drop that could also be explained by the decision by the United States and other members of the International Energy Agency to call on strategic reserves.
The week kicking off will be marked by the opening of the publishing season by companies for their first quarter results, with major US banks JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo set to return their copy. .
