The Paris stock Exchange is looking for a new engine between macro and microeconomics

The Paris Bourse is expected to navigate between statistics and publications of companies next week, in search of a new engine to continue its momentum in the month of April (Photo ERIC PIERMONT. AFP)

The Paris stock Exchange, like its european counterparts, is expected to navigate between statistics and publications of companies next week, in search of a new engine to continue its momentum in the month of April.

If the results season is nearing its end, a few behemoths will always be the agenda. Munich Re (DE:MUVGn) and Siemens (DE:SIEGn) in Frankfurt, or TechnipFMC (PA:FTI) in Paris, will present their performance of the beginning of the year.

In London, during a week shortened because of a public holiday on Monday, investors will take note of the results of the group of catering services Compass as well as the annual accounts of the telecom operator BT.

“There has been, on the whole very good signatures. In the United States, there were uncertainties on the giants of the technology, but the results have been outstanding. The dynamic is always of current events”, tells the AFP, Marjorie Sonigo, director of financial management at Pictet Wealth Management.

But operators will also be attentive to the macro-economy, inflation in the u.s., expected on Wednesday, announcing as the main statistic for the week.

This figure, examined closely by the u.s. federal Reserve, could cause a stir on the markets, if it proves higher than expected, reviving expectations of increases in interest rates.

However, analysts do not rely on this assumption, as much as the average hourly wage has hardly increased in April, according to the monthly report on u.s. employment released on Friday.

In the uk also, there will be talk of interest rates during the monetary policy meeting of the Bank of England (BoE). Economists had expected until recently to a new monetary tightening to bring inflation back towards the 2% objective. But recent economic indicators, to say the least, sluggish, have forced analysts to change their tune and is likely to increase the BoE to opt for the status quo.

– Markets cautious –

The new data released next week could give a boost to stock indexes?

After an April full of spirit, the first week of may has indeed been a little less enthusiastic, even if the weakening of the euro against the dollar has played a role of support for the european markets.

Several obstacles explain the hesitation of the investors, indicated to the AFP Christopher Dembik, head of economic research at Saxo Bank. “Even if no new risk is appeared this week, a confluence of factors urges caution,” there, in the foreground, which due to technical reasons.

Thus, “the main markets like the S&P 500 (us, ed), are close to important levels. The investors believe that the wave of decline in February was not sufficient and that there is the risk of a new downturn in the equity markets,” said Mr. Dembik.

Another reason for the reluctance of operators: the bond market the sovereign remains in the radar. The borrowing rate in the u.s. to ten years, which has recently exceeded the symbolic threshold of 3%, which appears always at high levels.

It is in this context that was held the meeting of the u.s. federal Reserve, which was completed Wednesday. However, the Fed opted for the status quo, while promising the gradual rises in interest rates, while inflation has an intimate knowledge of the target long target of 2%.

“The message was clear: the Fed will raise its rates without acceleration, while inflation will rise gradually being contained”, decrypts Ms Sonigo.

A different situation of what is happening in the euro zone, where the annual inflation rate slowed in April to 1.2%, from 1.3% in march, a figure lower than that expected by analysts.

Finally, we should not forget the record of protectionism in the united states: in effect, tariffs punitive damages on some $ 50 billion of chinese exports are to enter into force in the United States in less than three weeks. What to convince investors to stay on their guard.

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