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Calm in the markets before the Fed storm



(Paris) Investors remained on the lookout and world stock markets fell on Wednesday, shortly before the monetary policy decision of the American Central Bank and especially Jerome Powell’s press conference.

Down on Monday and Tuesday, the US indices were still moving in the red: the Dow Jones fell by 0.36%, the S&P 500 by 0.68% and the NASDAQ by 1.16% shortly after 4:45 p.m. GMT.

After starting the session in the green, the European markets turned around: Paris fell by 0.81%, Frankfurt by 0.61%, and London by 0.58%. Only the Milan Stock Exchange managed to stay in the green (+0.03%).

European markets “weren’t helped by poor manufacturing PMI numbers from Italy, France and Germany, all of which fell deeper into contraction than expected,” said Michael Hewson, CMC Markets analyst.

Investors are awaiting the decision of officials of the US Central Bank. The Monetary Policy Committee (FOMC) will announce its decision on Wednesday at 6:00 p.m. GMT and its chairman Jerome Powell will hold a press conference at 6:30 p.m. GMT.

Markets expect the Fed to raise rates for the fourth consecutive time by 0.75 percentage points to counter inflation, taking its main rate close to 4%, the highest since 2007, but watch for any signal a slowdown in these increases for subsequent meetings.

The economy “shows signs of slowing down to different degrees”, and in particular on “the real estate market”, explains Craig Erlam, analyst at Oanda.

This event eclipses the rest of the economic news, in particular the first figures of the American employment on Wednesday, with the monthly survey ADP/Stanford Lab which showed a still tight labor market, which created 239,000 jobs, more than expected.

On Friday, the Labor Department’s monthly report will also be very popular.

Government interest rates on the bond market also varied little.

China Cooled Luxury

Luxury stocks, sensitive to the health lock in China, a country which represents one of their main growth drivers, tightened after the reaffirmation of the zero-COVID-19 policy by the authorities: LVMH fell by 2.17% , Richemont by 1.92% and Burberry by 1.13%.

Favorite for Match Group

Match Group had the wind in its sails (+7.22%) after reporting slightly higher than expected turnover, driven by the dating site Tinder, which compensated for the slowdown in other platforms such as Meetic, OkCupid and Match. The group’s valuation has shrunk by 64% since the 1er January.

Semiconductor maker AMD was gaining ground (+1.69%), despite results below analysts’ forecasts and the lowering of its projections for the full year.

Conversely, Airbnb fell 9.63% after its quarterly publication. The stock lost 40% over the year. The Estée Lauder cosmetics group dropped 8.89% on Wednesday.

Commodities and Currencies

The euro fell 0.13% against the greenback, to 0.9864 dollars. The pound fell 0.26% to 1.1453 dollars around 4:45 p.m. GMT.

Bitcoin lost 0.22% to $20,435.

Oil prices rose after the publication of the level of American oil inventories fell sharply last week, and at the lowest since November 2014. The barrel of Brent from the North Sea for delivery in January, advanced 1.58% to 96.15 dollars at 4:45 p.m. GMT, that of American WTI by 2.07% at 90.20 dollars.

The price of European natural gas rose and was worth 130 euros per megawatt hour (+11.45%).

World grain prices, which had soared at the start of the week, began to fall on Wednesday after the announcement of Russia’s return to the Black Sea corridor agreement, despite doubts about the fulfillment of commitments made. by Moscow, with declines of 5% on the European and American wheat markets.

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