Some profit-taking adds a note of heaviness in Europe on this eve of the "4 Witches": the Paris Bourse is down 0.7%, to 7,280 (in tiny volumes), but the loss exceeded -1% before the opening of Wall Street.
In New York, traders were keen to end the 1st half of the year on a high note: the Dow Jones gained 0.8%, the S&P500 0.6% (instead of declining by -0.2% pre-opening) in the wake of the Fed's announcements, which left rates unchanged but also dashed hopes of further monetary easing (and even before 18 months to 2 years).

The Fed unambiguously signalled that monetary tightening would continue, without setting a timetable, but two further rate hikes remain on the table.

This last element briefly destabilized the Wall Street indices, as investors were hoping for a more accommodating message, which had in fact contributed to several sessions of gains for the stock market indices (the Nasdaq-100 is back above 15,000 and has posted +38% this year).

After the FED yesterday, it was the ECB's turn to speak: no pause in July (no discussion of this) in the cycle of tightening the 3 key rates (the repo rate is raised to 4%), as it is sharply revising upwards its expectations of core inflation in 2023 (from 4.6% to 5.1%) and 2024 (from 2.6% to 3%) due to the sharp rise in wages observed in the Eurozone, particularly in Germany (following union negotiations), before a decline to 2.3% in 2025.
The ECB is ruling out a recession scenario and anticipates 0.9% in 2023, then 1.5% in 2024...a very marginal improvement to 1.6% in 2025.

It will therefore take much longer than expected ('inflation too high, too long') to return to the 2% target, but the ECB is ruling out any change in the inflation target (towards 3%, for example).

In the USA, US figures appear contradictory, as manufacturing activity in the New York region rebounded unexpectedly in June: the Empire State index climbed to +6.6 after -31.8 in May (vs. -15 expected), but conversely, the manufacturing activity index for the Philadelphia region (Philly Fed) fell from -10.4 last month to -13.7 in June, its 10th consecutive negative reading, reflecting a worsening contraction in the sector.

The new orders index fell by two points to -11, its 13th consecutive negative reading, but the index of current deliveries rose by 15 points to +9.9, reaching its highest level since January.

Retail sales rose by 0.3% in May in the US, whereas they were expected to fall by 0.1% after rising by 0.4% in April.
Excluding automobiles and fuel, they rose by 0.4%, whereas they were expected to fall by 0.3%, after rising by 0.5% in April.

Industrial production fell by 0.2% in May in the United States, after rising by 0.5% in April. It was expected to rise by 0.1%. The capacity utilization rate fell more than expected to 79.6%, compared with 79.7% expected after 79.8% in April.
Lastly, the number of weekly jobless claims remained unchanged at 262,000 last week in the USA, instead of the 250,000 expected.000 expected.

On the bond front, it's more a case of 'fait accompli', but a slight tension is emerging, with OATs rising to 3.025% from 2.975% and Bunds +6Pt to 2.503%... and T-Bonds improving by -4.5Pts to 3.765%.
This weighed on the Dollar, which dropped -0.8% and fell back to 1.09200 against the Euro (a support was tested).
The fall in rates and the greenback favoured a +1% rebound in gold from 1.926 to 1.951$/Oz (insufficient to regain the former support of 1.965)

In French company news, Alstom announced that its first regional hybrid train (electric-thermal-battery) ran under test conditions in early April on the Toulouse-Mazamet and Toulouse-Rodez lines. It could be in service within the next few months.

Engie announces the creation of a new brand, Engie Vianeo, to meet the growing needs of electric vehicle users in France from this summer.

Voltalia reports that its subsidiary Helexia has signed an agreement with Comerc Energia to supply up to 90 megawatts of photovoltaic solar energy over a 20-year period to a series of decentralized production projects in Brazil.

Finally, Saint-Gobain announces that it has reached an agreement to acquire Hume Cemboard Industries (HCBI), a leading player in the cement board market for a wide range of applications (facades, partitions and ceilings) in Malaysia.



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