(Paris) Stock markets continued to rise on Wednesday, expecting inflation to return under control soon after the US Federal Reserve’s determination to act against rising prices.
Posted at 6:38 a.m.
Europe opened in the green: around 8:30 a.m., London took 0.39%, Frankfurt 0.19%, Paris 0.10% and Milan was stable.
Wall Street also posted strong gains on Tuesday, with the NASDAQ and S&P 500 returning to pre-Russian invasion of Ukraine levels. Analysts believe the market may have bottomed earlier, which would explain the rise despite the lack of any real good news.
In Asia, the Tokyo Stock Exchange even closed on Wednesday with a jump of 3% and experienced its seventh consecutive session in the green, helped by the weakness of the yen against the dollar.
In the bond market, interest rates have been climbing since the beginning of the week, after a speech by Federal Reserve (Fed) Chairman Jerome Powell, who showed determination to fight inflation.
Stocks and bonds show signs “that investors are applauding the Federal Reserve’s plan to fight more aggressively against runaway inflation,” said Ipek Ozkardeskaya, analyst at Swissquote.
She adds that the sharp rise in prices “is certainly more toxic in the long term for the economic fabric than higher rates”.
And too bad if the tightening of monetary policy by central banks temporarily slows down the economic recovery: bringing inflation under control at its highest level in 40 years in the United States and which could worsen with the surge in commodity prices, a consequence of the conflict. Russian-Ukrainian, seems essential for the markets.
“Investors do not seem to be worried for the moment by the signals sent by the yield curve in the United States,” notes John Plassard, investor specialist at Mirabaud.
The rate of short-term US debt (3 and 5 years) rose above the rate for long-term maturities (10 years), a phenomenon which shows that the market is also expecting a slowdown in growth.
In the United Kingdom, inflation accelerated further in February, to 6.2% over one year after 5.5% in January, and remains at a record level in almost 30 years.
Investors will take note this Wednesday of various production indices in Europe and the United States and will follow the speeches of Jerome Powell and another member of the American central bank.
Oil pulled by possible sanctions
Oil prices rose moderately, with the prospect of new sanctions against Russia which could be announced by Western countries.
Around 4:25 a.m., a barrel of Brent from the North Sea for delivery in May gained 1.22% to 116.92 dollars. That of West Texas Intermediate (WTI) for delivery the same month, which is the first day of use as a benchmark contract, gleaned 0.89% to 110.24 dollars.
On Thursday, one month to the day after the start of the invasion of Ukraine, Westerners will gather in Brussels for NATO, G7 and European Union summits and are expected to announce “new sanctions against the Russia,” according to Jake Sullivan, national security adviser to Joe Biden.
They could also strengthen those that already exist.
Alibaba drives technology
Chinese e-commerce giant Alibaba has announced that it is increasing its share buyback plan to $25 billion from $15 billion. After an 11% jump on Wall Street on Tuesday, the group’s action took 6.53% in Hong Kong and led other Chinese technology stocks such as Xiaomi (+4.37%) or Tencent (+0). .57%). The largest shareholder of Alibaba Softbank, jumped 7.21% in Tokyo.
On the side of the euro and bitcoin
The euro lost 0.1% against the greenback at 1.1018 dollars.
The yen fell another 0.21% against the dollar, to 121.05 yen to the dollar, falling to a six-year low.
Bitcoin lost 1.15% to $42,115.