(Paris) The financial markets were cautiously awaiting the decisions of the Fed on Wednesday, a feeling reinforced in Europe with the tensions in Ukraine and the new sanctions against Russia proposed by the European Commission.
Posted at 8:08
After an opening close to equilibrium, the European markets weakened. Paris fell by 0.41%, Milan by 0.34% and London by 0.45% around 7:45 a.m. Frankfurt was stable (+0.01%).
Conversely, futures contracts in the United States pointed to an increase of around 0.5% for the three main indices.
The expected event of the day is the end of the meeting of the American Federal Reserve, with the announcement of the next measures of the institution and the press conference of its president Jerome Powell, after the close of the European markets.
Barring an about-face, the Fed will raise its key rates to control soaring inflation, a delicate battle with the risk of recession in the United States.
After having been slow to become aware of the danger of inflation, the institution “has the duty to catch up with the ball” by a turn of the monetary screw, explains Michael Israel, manager of IVO Capital Partners.
In addition to the half-percentage-point increase in its key rates, considered as confirmed by the market, indications of future increases will be scrutinized.
“We are coming to the end of a 10-year cycle where the Fed intervened to prevent growth from collapsing. Today, it is a new configuration”, where inflation is the priority, comments Mr. Israel. “If the word growth is uttered a lot, we will know that, in the new cycle, the Fed keeps growth in mind and is not only obsessed with inflation. »
Investors are also awaiting the ADP report on private job creation in the United States, a prelude to the official employment report scheduled for Friday.
Aside from the Fed’s monetary tightening, the global outlook is unattractive, with China’s lockdowns and war in Ukraine still weighing on global growth prospects.
Oil rises with the threat of a European embargo
Crude prices were up sharply, with both black gold benchmarks boosted by the European Union’s proposal for a phased embargo on Russian oil.
Around 7:25 a.m., a barrel of Brent from the North Sea for July delivery took 3.92% to 109.08 dollars. US WTI for June delivery rose 4.04% to $106.55.
The European Commission has proposed a gradual EU embargo on oil and petroleum products purchased from Russia, in retaliation for the war in Ukraine.
Brussels is also proposing to exclude three additional Russian banks, including Sberbank, the country’s largest institution, from the Swift international financial system.
The bets continue for Flutter
Betting group Flutter was up 8.25% after well-received quarterly results showed its ambition to expand into the US is paying off, as regulations in the UK could be tightened to protect risky gamblers.
On Wall Street, the results also raised the title of semiconductor specialist AMD in pre-market electronic trading (+5.88%), as did those of Airbnb (+5.37%) and Starbucks. (+6.44%).
Boohoo dives
British online clothing retailer Boohoo plunged 11.51% after falling slightly into the red for its 2021/2022 financial year, undermined by cost inflation.
Clothing specialists Zalando (-2.18%), JD Sports (-3.12%), H & M (-2.38%) also suffered.
Lyft skids
The VTC Lyft reservation platform collapsed by more than 25% on Wall Street in pre-session exchanges, after registering fewer passengers than expected and making disappointing forecasts. Its competitor Uber fell by 0.92%.
On the currency side
The euro took 0.10% against the dollar, to 1.0531 dollar.
Bitcoin took 3.25% to $39,015.