The Paris stock market is down by almost 0.5% this morning, around 6890 points, penalized by the heavy decline in banking stocks, with Société Générale down 6.4% and BNP Paribas down 5%.

Last night, UBS announced its intention to take over Credit Suisse for three billion Swiss francs (around three billion euros), an unexpected decision for many investors that nipped in the bud the timid hopes of a rebound that were emerging at the end of last week.

This forced marriage penalizes the shares of the major European banks, which have been at the heart of market concerns for a week now.

Against this backdrop, the Bank of England, the Bank of Canada, the European Central Bank (ECB), the Bank of Japan, the Swiss National Bank (SNB) and the US Federal Reserve today announced concerted measures to improve the supply of liquidity through standing swap agreements in US dollars

The burden 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 preparing to face the same turbulence that has plagued the markets for the past ten days: a seemingly endless worsening of the global banking crisis.

In view of the mistrust currently surrounding European banks, the Federal Reserve's Monetary Policy Committee meeting, to be held tomorrow and Wednesday, is almost a non-event.

Markets nevertheless 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 rate the probability of a status quo from the US central bank at the end of this week's FOMC meeting at almost 48%.

The remaining 52% expect a rate hike limited to 0.25 percentage points.

If the Fed were to raise rates by 0.5% - which seemed quite possible just a week ago - 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 - 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 set for high volatility this week, with big swings in the balance.

In 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 from its main banking partners at the beginning of the month.

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.


Copyright (c) 2023 CercleFinance.com. All rights reserved.