(Paris) Global markets continued to react Monday to the uncompromising speech of the President of the American Central Bank (Fed) Jerome Powell on Friday, with a short-term outlook that depressed equities and sent rates jumping.
Posted at 8:02
The stock markets suffered: already in sharp decline on Friday, the European stock markets fell further. Paris lost 1.77%, Frankfurt 1.29%, and Milan 1.07% around 7:25 a.m. The London Stock Exchange is closed due to a UK holiday.
Same trend in Asia, where the Tokyo Stock Exchange fell by 2.66%.
After a Friday when the three main indexes lost between 3% and 4%, with the worst session in three months for the Dow Jones, Wall Street futures predicted another opening lower, between 0.9% and 1 .2%.
Without news or major indicator on Monday, investors continue to take into account Jerome Powell’s speech on Friday, which did not go their way.
“Investors’ hopes of seeing the Fed’s monetary policy become less restrictive as early as 2023 have been dashed,” writes IG France analyst Vincent Boy.
Mr. Powell confirmed that the US central bank would “vigorously use its tools” to curb inflation. This will lead to “a long period of weaker growth”, but giving it up would, he says, be even more damaging to the economy.
The consequences of this speech in Jackson Hole (Wyoming), during the annual high mass of central bankers, did not only affect the equity markets.
On the debt market, the interest rate for the US 2-year loan, the most sensitive to the Fed’s short-term policy, rose again and was on Monday at its highest since 2007, at 3.45. %. It was still significantly higher than the yield on the 10-year bond (3.11%), a sign seen as a harbinger of a recession.
The riskiest assets, such as bitcoin, were down: the cryptocurrency lost more than 8% compared to its level on Thursday, and fell back below $20,000 ($19,790 around 7:20 a.m.) for the first time since mid-July.
The euro remained below parity with the dollar but regained some ground (+0.10% to 0.9975 dollar for one euro).
SAS plunges back
Shares of Swedish airline SAS fell more than 13% as a DNB Markets analyst warned in a note quoted by Bloomberg that the placement since July under US bankruptcy protection , should not put the shares of the company, which has lost 55% since the beginning of the year, back on track.
On Friday, it published a net loss of 1.84 billion Swedish crowns (about 170 million euros) between May and July.
Tensions over superprofits in France
French Prime Minister Élisabeth Borne said on Saturday that she would not “close the door” to a taxation of the “super profits” of companies, while preferring that the company which can “lower prices for the consumer and give power to purchase from its employees.
Community-related companies, such as Engie (-3.81%), Veolia (-2.12%) suffered on Monday, dragging down other energy companies, such as Vestas Wind (-1.88%), Siemens Energy (-1.95%), or RWE (-1.88%).
On the oil and gas side
Oil prices rose a little: a barrel of WTI for October delivery took 0.49% to 93.52 dollars, that of Brent North Sea at the same maturity 0.09% to 101.08 dollars around 7:20 a.m.
The price of European natural gas fell by 19%, to return to 274 euros per megawatt hour on the reference market, the Dutch TTF around 7:10 a.m. euros, which is very close to its historical record in session.