Concerned by the Fed's restrictive tone, European stock markets are expected to fall. The Eurostoxx 50 opens at 3,622.01 points (-0.79%), the CAC 40 at 6,276.88 points (-0.81%), the DAX 40 at 13,256.74 points (-0.61%), the FTSE 100 at 7,144.14 points (-0.58%), the SMI at 10,806.23 points (+0.21%), the AEX at 667.24 points (-0.58%), the SMI at 10,806.23 points (+0.21%), the AEX at 667.24 points (-0.58%) ,90%), the BEL 20 at 3,553.44 points (-1.01%), the IBEX 35 at 7,968.60 points (-0.38%), the DJIA at 32,147.76 points (-1.55%), the Nasdaq at 10,524,80 points (-3.36%), the S&P 500 at 3,759.69 points (-2.50%), the Nikkei 225 at 27,663.39 points (-0.06%).

With respect to exchange rates, the change from the close indicates that in New York. EUR/USD is at 0.9829 (+0.11%), EUR/JPY at 144.78 (-0.32%) and USD/JPY at 147.32 (-0.41%).

Today, the earnings season continues with quarterly results from Legrand, Euronext, BNP Paribas, Solvay, Neoen and SES. For the third quarter, Stellantis, Teleperformance, Eiffage and JCDecaux present their sales figures. An investor day is organized by Forvia, the group created by the merger of automotive suppliers Faurecia and Hella. On the evening of Wednesday, the insurer Axa announced that its turnover increased by 3% over the first nine months of 2022. Ensuring that investors on the consequences of the implementation of IFRS 17 and IFRS 9 accounting standards as of January 1, 2023. According to Forvia, aggregate operating income should not be affected after the transition from IFRS4 to IFRS 17 and equity should be “relatively stable.” In addition, due to the postponement of customer projects in the fourth quarter and in 2023, the oil and gas services group CGG saw its net loss fall in the third quarter, even though it considers this quarter to be “low.”

After another drastic interest rate hike by the US Federal Reserve (Fed), which did not send the accommodative signals expected by the market, European equity markets are expected to open lower today.

The FTSE 100 contract lost 45 points, or 0.6%, while the DAX 40 contract fell 95 points, or 0.7%. According to data from the IG Markets broker, the CAC 40 futures contract lost 46 points, or 0.7% at 7:35am. While indicating that the fight for price stability could involve smaller rate hikes in the coming months, the Fed yesterday again showed its determination not to let its guard down in the face of inflation.

After a fourth increase of 75 basis points since June, the central bank yesterday raised the federal funds rate, the interbank reference rate, to a range of 3.75% to 4%, the fastest rise in interest rates since the 1980s in the United States. While Wall Street was hoping for “accommodative” signals from the Fed to preserve growth, the idea that rates could eventually reach even higher levels than expected last month was not well received by the markets. Yesterday, the Dow Jones Index closed down 1.6%, while the S&P 500 lost 2.5% and the Nasdaq Composite 3.4%.

On Thursday, Asian stock markets fell, the Hang Seng Index lost 2.8% in Hong Kong and the Shanghai Composite lost 0.3% at the end of trading. For its part, the Tokyo Stock Exchange is closed for a holiday in Japan.

Today, US Treasury bond yields are rising. They are thus continuing the momentum observed after the statements of the Federal Reserve Chairman last night. At his press conference, Jerome Powell said that it was “very premature” to consider a pause in interest rate hikes. Spartan Capital points out that “by declaring that it is premature to think in these terms, [Jerome] Powell is damping hopes for a pause.”

FHN Financial indicates “The increase of 75 basis points was expected, but the change in the Fed's statement in the third paragraph focuses on two things we already knew: rates will be raised as necessary to fight inflation, and the effects on the economy of the tightening measures taken Six months ago will be taken into account when setting rates.” He also noted that “The implications of this addition are still to be clarified, but it could indicate to the market that a slowdown in rate hikes does not necessarily mean a lower final rate than expected.”

After the expected increase in the Fed's key interest rates, the euro has changed little against the dollar today. According to MUFG Bank, Jérôme Powell's speech was perceived as restrictive. For this bank, the comments of the Fed Chairman suggest a higher terminal rate than the September “dot plots”. This rate was 4.625%, and the desire to maintain high rates for an extended period remains valid.

As investors continue to assess the implications of the Fed's monetary policy decision, oil prices fell this morning.