(BFM Bourse) – Revealing an increase in consumer prices that was even stronger than expected, the American CPI index for the month of June increases the pressure on the Federal Reserve of the United States to continue monetary tightening at a forced march. Investors’ risk aversion rose sharply, with the CAC 40 losing almost 2% in the process.
Having ended Tuesday on a rather alert note (up 0.8% while the session had started down -1%), the Paris market, which was already cautious at midday on Wednesday, fell sharply to the announcement of the consumer price index for June in the United States. Around 2:50 p.m., twenty minutes after the publication of the CPI, the CAC 40 fell by -1.73% to 5,939.36 points, while theeuro was once again close to parity with the greenback.
On average, economists’ expectations placed the rate of increase in consumer prices (CPI) in June at +8.8% over one year, ie 1.1% growth since the previous month. But once again, the situation as analyzed by the Bureau of Labor Statistics is proving to be more worrying than expected since the difference from one month to the next comes out at +1.3%, i.e. an inflation rate out of twelve. month of 9.1%, the highest rate since November 1981.
Core inflation (excluding food and energy, whose prices are more volatile) is estimated at 5.9%, above the 5.7% expected.
As a consequence, theeuro slid back towards parity before erasing some of its losses at 1.0018 dollars (-0.2%). Oil prices fell below 100 dollars to 98.87 dollars (-0.62%) on Brent and 95.39 (-0.47%) on WTI.
Between high inflation, a looming recession and the Russian invasion of Ukraine, stock and bond markets suffered particularly badly during the first half of 2022. “We don’t expect a turnaround in the short term, as long as it’s unclear when the cycle of inflation and rising rates will end,” said Stefan Kreuzkamp, chief investment officer at DWS. “Growth should remain under pressure. This will have repercussions on the evolution of corporate earnings,” he said, while DWS is revising its targets for the main stock market indices by 5 to 10% downwards.
In addition to this appointment with US inflation, operators will learn this week of the first publications of results for the period ending at the end of June.
Guillaume Bayre – ©2022 BFM Bourse
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