Posted 15 Feb. 2023 at 17:54Updated Feb 15. 2023 at 06:18 PM
Even before the publication, this afternoon, of the figures for retail sales in the United States for the month of January, which rebounded much more markedly than expected, Deutsche Bank had just increased its forecast for the final interest rate in the United States from 5.1 to 5.6%, implying two additional rate hikes from its previous estimate, or four hikes of 25 basis points in total during the next four monetary policy meetings in March, May, June and July, and no longer just at the meetings in March and May, such as the consensus. ” Yesterday’s US Inflation Numbers [ont été] the straw that broke the camel’s back “, wrote this morning, in a note, the strategist Jim Reid.
Read also :
For the past two weeks, economic indicators have followed one another to show that inflationary pressures are still at work in the world’s largest economy despite multiple turns of the monetary screw to make money more expensive and calm economic overheating. There were the prices of used cars (which experienced their biggest increase in January for fourteen months), employment figures in the United States (where job creations were twice as last than in December, after five months of decline), the rise in inflation expectations reflected in the U.S. consumer confidence index from the University of Michigan, the upward revisions to consumer price figures ( CPI) of the last six months of the year 2022 (where we discover that, finally, inflation increased by 0.1% in December and not fell by 0.1%) then, yesterday, the CPI of January, which confirmed that the dynamics of disinflation were slowing down in the United States.
Rates peak at 5.27%, say Fed funds futures
« Since the FOMC meeting [comité de politique monétaire américain] d[u] [1er] February, our economists drew three essential lessons, reports Jim Reid de Deutsche Bank. First, the labor market has so far proved remarkably resilient to Fed tightening. Second, CPI data revisions and yesterday’s CPI print mean that less progress has been made towards disinflation. And third, financial conditions have not tightened enough for the Fed to have confidence in a meaningful improvement. [de l’inflation] over the next few months. »
Retail sales figures published today (+3%, the fastest pace since March 2021, against -1.1% in December and +2% expected by the Bloomberg consensus of economists) will not fail to reinforce these fears. This numbers ” may be partly linked to an unusually mild winter in the northeast, alongside unexpected strength in the labor market tries to qualify Paul Ashworth, an economist at Capital Economics, but he acknowledges that “ under these circumstances, the risks are clearly on the upside with regard to our estimate of a Fed funds peak of just below 5%. »
Among participants in the federal funds market, we stopped believing, at the beginning of February, following the publication of employment figures, that the final rate would not exceed 5%. According to the implied probabilities drawn from positions in the Fed funds futures market – in which banks and bond managers intervene to hedge against fluctuations in short rates – the maximum rate will be reached in July, at 5.27 %, where, at the very beginning of the month, they saw a peak at 4.89% in June.
“Very encouraging” start to the year for Kering
On Wall Street, the Dow Jones and the S&P 500 fell today for a second session in a row. In Europe, the Stoxx 600 index, on which the largest stocks in the area are listed, nevertheless manages to progress by 0.42%, led by distributors Carrefour et Ahold Delhaize (+8%), which published better than expected 2022 financial results, and by the French luxury giants Dry, LVMH et Hermes.
Read also :
With a gain of 8.5%, Carrefour signs the best performance of the Cac 40 (+1.21 to 7,300.86 points), followed in the ranking by Dry (+3.03%), which also published its 2022 accounts. The owner of Gucci, its flagship brand which accounts for more than half of its turnover and its profits, had however started the stock market session badly, in going so far as to lose almost 5% on the observation of a sharp decline in sales of Gucci in the fourth quarter, but the encouraging comments of the management, during the presentation of the results, ended up having the upper hand. The group’s financial director, Jean-Marc Duplaix, reported a start to the year 2023 “very encouraging”thanks to the reopening of China, which allowed a strong demand during the Lunar New Year.
In a global luxury research note sent to its clients today, Bank of America Securities explains all the good things it thinks about the sector, its favorite by the way. Investment banking data analysts speak of a “very robust momentum in January”with “a strong recovery in Greater China” et “a reacceleration in the United States” while in Europe sales to tourists are “a significant engine of growth. »
LVMHalso thanks to the enthusiasm aroused by the appointment of Pharell Williams as new artistic director of Louis Vuitton,closed with a gain of 1.49%. Hermes rose 1.14%.
Read also :
