Rebound in European stock markets awaiting Fed announcements

Global stock markets are a roller coaster. In a tense geopolitical context since the invasion of Ukraine by Russia and the pressure put on raw materials, the sessions alternate between sharp declines and technical rebounds. On Wednesday, European markets opened sharply higher, stimulated by the rebound in Asian markets. In Europe, the main indices arrogated nearly 3% around 11:30 a.m. in Paris (+ 3.31%) to 6,565.13 points, Frankfurt advanced by 3.07% and Milan by 3.25%. London took 1.05%.

The bullish trend is coming from Asia, where China’s financial leaders pledged on Wednesday to maintain stability in capital markets and craft effective policies against real estate risks, according to state media. Enough to boost the Hong Kong Stock Exchange (+9.08% at the close) and that of Shanghai by 3.5%. Tokyo gained 1.64%.

Luxury stocks, very sensitive to China, pranced at the top of the CAC 40. LVMH climbed 4.73% to 618 euros, Hermès 5.34% to 1,173.50 euros and Kering 4.72% to 583, 50 euros. On the technology side, STMicroelectronics (+5.56% to 37.11 euros), Worldline (+4.61% to 42.08 euros), Dassault Systèmes (+4.42% to 44.16 euros) exulted in the same way , in the wake of the technology index of the Hong Kong Stock Exchange which rose by more than 20%, a record.

Global stock markets suspended on Fed decision

However, the Western session promises to be volatile on Wednesday due to the continuation of the war in Ukraine and the increase, expected after the European close, in the key rates of the American Federal Reserve to fight inflation.

“What will matter is the hawkish attitude, or not, of the US Federal Reserve’s monetary policy committee regarding future rate hikes,” said Jeffrey Halley, analyst at Oanda. Investors are anticipating a 25 basis point hike in key rates, with the triggering of a series of five or six hikes expected this year which they believe should push rates up to around 1.50%.

Markets are hoping that the findings of the US central bank “will provide more clarity on the potential consequences of the war in Ukraine on future policy of the Fed”, writes Ipek Ozkardeskaya, analyst at Swissquote.

For Jeffrey Halley, “the stagflationary wave (high inflation combined with weak growth) emanating from the Ukrainian conflict will continue to sweep the world long after the end of the conflict, and given its impact on growth, it is difficult to imagine an environment conducive to equity markets”.

On the oil side, a barrel of Brent from the North Sea for delivery in May, which closed below $100 on Tuesday for the first time since the second day of the invasion of Ukraine, almost three years ago. weeks, started to rise again in the morning. The reference price for this variety of oil rose 3.09% to 103 dollars, while a barrel of American West Texas Intermediate (WTI) for delivery in April took 2.33% to 98.71 dollars.

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