stocks-rise,-ecb-and-boe-in-sights

Stocks rise, ECB and BoE in sights

by Laetitia Volga

PARIS (Reuters) – Wall Street is heading for a new bullish session and European stock markets progress at mid-session Thursday, the initiatives announced by the Federal Reserve to counter the surge in prices being welcomed by the markets pending the decisions of the European Central Bank (ECB) and the Bank of England (BoE).

Wall Street Futures Show Open Up 0.7% for the Dow Jones, around 0.8% for the S&P – 500 and 1% for the Nasdaq.

The New York Stock Exchange has already taken between 1% and 2, 15% Wednesday, the accelerated reduction in bond purchases announced by the Fed, whose rate development projections suggest three hikes by the end 2022, having reassured the market about the institution’s desire to stem inflation, which it no longer qualifies as transitory.

In the wake of the progression of the American market, the CAC 40 in Paris gained 1, 66% to 7. 042, 37 points to 11 h 40 GMT. In Frankfurt, the Dax advances by 1, 74% and in London, the FTSE by 1, 19%.

The pan-European index FTSEurofirst 300 scores 1, 50%, the EuroStoxx 50 of the euro area is up by 2, 05% and the Stoxx 600 of 1, 64%.

Investors are now preparing for two other major monetary policy meetings: the decisions of the Bank of England at 12 h 00 GMT then those of the ECB at 12 h 45 GMT, which will be followed by a long-awaited press conference by its president, Christine Lagarde.

Many market players expect the ECB to confirm the end of purchases next March pandemic emergency procurement program (PEPP) obligations and announces a temporary and limited strengthening of the APP program.

“This would be a bit of a recalibration and future policy developments should make it clear that no rate hikes are expected in 2022. The ECB will remain ultra-accommodating, “said Neil Wilson at Markets.com

The first results of IHS Markit’s PMI surveys have shown a slowdown in activity growth. in December, in particular in services, due to the new measures introduced to deal with the resurgence of the pandemic and the spread of the Omicron variant.

VALUES IN EUROPE

At values, Airbus advances by 3, 15% after being chosen by Qantas as supplier privileged for the renewal of its domestic fleet.

Valneva leaps from 11, 45%, the French biotechnology company having announced the first positive results for the use of its COVID vaccine candidate – 19 as a booster dose.

At the back of the pack Stoxx 600, EDF fall from 11, 025%, at the lowest in three months, after having detected faults near cooling of a nuclear power station, forcing the group to extend its shutdown and interrupt production from another power station equipped with the same type of reactors.

Boohoo unscrews from 15,63% and Telecom Italia drops 1, 35% after warning about their results.

Novartis earns 4, 35% after launching a new share buyback program for a maximum amount of 15 billions of dollars.

EXCHANGES

The dollar fell 0.2% against a basket of benchmark currencies after reaching a three-week peak on Wednesday in reaction to the annos nces from the Fed.

The euro is stable at 1, 1295 dollar, pending the ECB’s monetary policy press release and Christine’s speech The guard.

For its part, the pound sterling is also unchanged against the greenback before the announcements of the BoE, which must also juggle a situation of high inflation and concerns related to COVID – 19.

“If it were to raise its key rate, which would be surprising, it would be positive for the pound (…) But recent comments from the BoE suggest that it will place more emphasis on the pandemic at this meeting, “Commerzbank analysts said in a note .

If the BoE opts for the status quo, the pound’s reaction “will depend on the institution’s concern about inflation and whether it signals an upcoming rate hike in February” , added the German bank.

RATE

The yield on ten-year US Treasuries fell almost three basis points to 1, 4361%.

On the European market, movements are very limited before the ECB’s announcements: the German ten-year is trading at -0, 366% and its French equivalent to -0, 025%.

OIL

Oil prices rise after the announcement by the US Energy Information Agency (EIA) of a two-fold decrease times greater than expected crude stocks in the United States last week.

Brent takes 1.5% at 74, 99 dollars and l American crude (West Texas Intermediate, WTI) 1, 62% at 66, 02 dollars.

(Laetitia Volga, edited by)