The Paris stock market is going off in all directions: after reopening almost at equilibrium, the CAC40 plunged -2% to around 6,796 points, penalized by the heavy decline in the banking sector (with up to -7% on Société Générale and -5% on BNP Paribas), before starting a spectacular rebound of +3.3% in a straight line to around 7.015Pts (+1.3%).

The rally gained momentum as Wall Street reopened on a positive note (+0.4% on the S&P500, +1% on the Dow Jones), reassured by the coordinated action of the world's 6 largest central banks, who are joining forces to saturate the financial system with liquidity... in no-limit mode.
The FED, the Bank of England, the Bank of Canada, the European Central Bank (ECB), the Bank of Japan and the Swiss National Bank (SNB) today announced concerted measures to improve the supply of liquidity through permanent swap agreements (loans against collateral provided by banks) in US dollars.

Last night, UBS announced its intention to buy Credit Suisse for three billion Swiss francs (around three billion euros), a decision forced by the Swiss banking authorities (FINMA) and the SNB.
The buyer, UBS, has been offered a credit line of 100 billion Swiss francs, plus 9 billion dollars to cover post-merger losses assumed by the "state", i.e. the Swiss taxpayer

The weight of bad debts and the impact of rising interest rates are likely to penalize the most fragile banks, raising fears of further bankruptcies.

This week, investors are therefore preparing to face the same turbulence that has plagued the markets for the past ten days, namely a seemingly endless worsening of the global banking crisis.

Given the current mistrust surrounding European banks, the Federal Reserve's monetary policy committee meeting, to be held tomorrow and Wednesday, is almost a non-event.

Nevertheless, the markets seem to be anticipating a change of course on the part of the Fed, which should be keen not to further destabilize a financial system already plunged into turmoil.

According to CME Group's FedWatch barometer, investors estimate a 48% probability of a status quo from the US central bank at the end of this week's FOMC meeting.

The remaining 52% are counting on a limited rate hike of 0.25 percentage points.

'If the Fed were to proceed with a 0.5% increase - which seemed quite possible just a week ago - the markets could be seriously shaken', warns Steven Bell, chief economist for Europe at Columbia Threadneedle Investments.

The erratic movements of the CBOE's VIX volatility index (stable on Monday)-often dubbed Wall Street's 'barometer of fear'-also point to wide market swings.

While some strategists maintain that the situation is not as serious as it was at the time of the 2008 financial crisis, markets are poised for high volatility this week, with big swings in the balance.
On the interest-rate front, after easing sharply in the early morning (risk-off), scores are returning to equilibrium: the OAT is down 2.5pts at 2.6700%, while US T-Bonds are up 5pts at 3.447%, compared with a low of 3.29%.

In other French company news, Aéroports de Paris (ADP) announced a framework agreement with GMR Airports Infrastructure Ltd (GIL), its partner in the airport holding company GMR Airports Ltd (GAL), initiating a process that should lead to a merger between GIL and GAL in the first half of 2024.

Orpea announced on Monday that it had finalized the terms of the additional financing obtained at the beginning of the month from its main banking partners.

Orange is set to implement a collective redundancy plan covering around 700 positions in the Orange Business division, according to Le Monde and Les Echos. The plan is due to be presented to union representatives.

Lastly, GTT (Gaztransport and Technigaz) reports that, for the fourth year running, it has taken first place in the INPI's ranking of ETI (intermediate-sized companies) patent filers, with 57 patents published in 2022.



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