(Paris) Stock markets fell on Thursday under the blow of persistent inflation which reinforces fears of more offensive monetary tightening in the United States and of a slowdown in economic growth, or even a recession.
Risk aversion was evident in Europe in Paris (-2.26%), Frankfurt (-2.02%), Milan (-1.44%) and London, which lost 2.09% around 7 45 a.m. after Britain’s gross domestic product fell in March.
For its part, Wall Street was preparing to extend its decline from the previous day, with the futures contracts of the three main American indices posting losses of between 0.38% for the Dow Jones and 1.38% for the NASDAQ before the end of the month. ‘opening.
In Asia, red also dominated after the announcement of a less marked than expected slowdown in inflation in the United States last month.
“The peak of inflation, long awaited by economists and the US Federal Reserve, has not yet arrived. The underlying trend in the stock market is still negative,” writes Christopher Dembik, head of research and strategy for Saxo Bank.
Investors are realizing that persistent inflation could prompt the US Federal Reserve to tighten more in the coming months, especially as several central bankers believe that the time has come to step up a gear to curb inflation.
The European Central Bank is preparing the ground for an interest rate hike in July.
The powerful easing in sovereign yields this week (with the US 10-year interest rate well below the 3% mark, surpassed on Monday) suggests “that the sovereign debt market is becoming less concerned about inflation than about a slowdown in the global economy,” observes Michael Hewson, analyst for CMC Markets.
The wave of risk aversion not only translated into a bond market craze, but also allowed the dollar to do well, while it contributed to weigh heavily on bitcoin.
The euro was down 1.02% against the greenback, at $1.0407.
Bitcoin price, which sank as low as $25,424 overnight Wednesday-Thursday, was hovering around $27,000 around 7:30 a.m., down 30% month-on-month and at levels not seen since December 2020 .
Bitcoin is down 60% since its all-time high last November, and the entire cryptocurrency market is over $1.2 trillion, down from over $3 trillion at its peak.
The difficulties of “stablecoins” (stable cryptocurrencies) affected investor confidence in the sector.
After soaring almost 5% the day before, oil prices were down, weighed down by fears about demand for black gold due to runaway inflation, aggravated by the war in Ukraine.
Around 7:30 a.m., a barrel of Brent from the North Sea for delivery in July lost 1.22% to 106.20 dollars.
A barrel of US WTI for June delivery fell 1.18% to $104.46.
Uncertainty about “the timing of a European Union embargo on Russian oil imports” contributes to this “turmoil” in crude prices, according to Michael Hewson.
German conglomerate Siemens, one of Europe’s largest industrial groups, announced Thursday its complete withdrawal from Russia as charges related to Western sanctions weigh on its results. The stock plunged 4.47% in Frankfurt around 7:30 a.m.
The second German bank Commerzbank (-2.04%) indicated for its part that its Russian subsidiary was not for sale, on the sidelines of its results.
Insurance giant Allianz (-3.09%) reported a sharp decline in first quarter net profit on Thursday, while confirming its annual target. The Spanish telecoms group Telefonica (4.64%) has also confirmed its objectives for 2022 after having made 706 million euros in profits in the first quarter.