Investors are preparing for another sharp hike in the key rate from the US central bank (Fed), which meets on Tuesday and Wednesday.
The Paris Stock Exchange closed sharply down 1.35% on Tuesday, scared by the rise in bond rates ahead of the monetary policy decision of the US central bank, which meets until tomorrow and is expected to raise rates sharply. . The star CAC 40 index fell 82.12 points to 5,979.47 points, closing below 6,000 points for the first time since mid-July. On Monday, it had fallen by 0.26%.
"We are in a very busy week with several central bank meetings“, those of the United States, the United Kingdom, Sweden, Japan, and “Italian elections this weekend“, enumerates Clémence de Rothiacob, manager of Richelieu Gestion.
Investors are preparing for another sharp rise in the key rate from the US central bank (Fed), which meets on Tuesday and Wednesday, to fight inflation. Analysts broadly agree to predict a third straight 75 basis point hike, although some are even considering 100 basis points.
This prospect is driving up bond yields, which have already been pushed very high by previous central bank rate hikes. The interest rate on the French 10-year loan reached the 2.50% mark on Tuesday, its highest since January 2014, and was worth 2.47% around 6:10 p.m. (4:10 p.m. GMT).
Sovereign yields were also climbing elsewhere in Europe and the United States, where the 2-year rate, which better reflects monetary policy expectations, was only a breath away from the symbolic threshold of 4%, which it has not crossed since October 2007.
Additional stress factor for the European bond market: “This evening, Christine Lagarde will give a speechon the monetary policy of the European Central Bank (ECB), recalls Clémence de Rothiacob. "It is expected to confirm the continuation of monetary tightening, there is no reason for the ECB to tone down its rhetoric.»
Real estate is bogged down
Real estate values, a sector that reacts badly to high interest rates, according to Clémence de Rothiacob, have lost ground. The trend affected office and commercial space rental companies URW (-4.29%), Klepierre (-4.39%) and Gecina (-4.12%) as much as builders such as Bouygues (-2 .07%), Eiffage (-2.16%) or Vinci (-1.62%).
Horse betting for the FDJ
La Française des jeux rose 1.28% to 31.76 euros, after announcing on Monday that it was in exclusive negotiations to buy ZEturf, “second operator in the French online horse racing betting marketbehind the PMU. Founded in 2001, ZEturf holds around 20% market share in France in online horse racing betting and is present in the Netherlands, Belgium and Spain.