ECB meeting to get clues on rate cuts, STMicro and LVMH in report

This is the main meeting of the week apart from the first major publications of annual results as part of Cac 40. Governors of the European Central Bank (ECB) meet to take decisions on monetary policy.

The verdict is expected at 2:45 p.m., no real suspense. Indeed, during the World Economic Forum in Davos, the institution’s president, Christine Lagarde, suggested that the first rate cut in the eurozone could happen during the summer. This dampened sentiment in the markets as investors hoped for an earlier release in the spring.

June, a turning point for the ECB?

So if the status quo is expected at the end of this Thursday’s meeting, Christine Lagarde’s comments and possible explanations will be closely scrutinized during her press conference starting half an hour later. ” The ECB could present its vision for the economy on Thursday, as well as a possible timetable for policy changes, Michael Hewson of CMC Markets suggested earlier this week. Markets currently expect it to cut rates four times this June, in increments of 25 basis points, although that could happen sooner if economic data deteriorates further. “.

A horizon that was also mentioned by the ECB’s chief economist, Philip Lane, who estimates that the central bank will have the necessary data available in June (change in inflation, the outcome of wage negotiations in Germany and Italy) to form a reasoned opinion on the situation and the decisions that is to be done.

An explosion of American characters is scheduled for the same time, at 2:30 p.m. In detail, weekly jobless claims (200,000 expected vs. 187,000 the previous week), trade balance for December, durable goods orders for the same month (+1.1% but +0.2% excluding shipping) and especially the first estimate of GDP growth for the fourth quarter. It was expected to slow to 2% in annualized data, compared with 4.9% in the third quarter, according to the Bloomberg consensus. “Real GDP growth of 4.9% annualized in the third quarter was an anomaly. There was a slowdown in the fourth quarter, but it was not even a breath of fresh air given the latest data,” Oddo BHF explained on Monday. New home sales for December will follow at 4:00 p.m.

STMicro in the morning, LVMH in the evening

In the morning, we will have the reading of the Ifo business climate index in Germany for January. With little change in sight. The expectations component is expected at 84.8 points compared to 84.3 in December, the current situation is stable at 88.5 points.

In France, STMicroelectronics’ pre-market and LVMH’s post-market annual publication ball begins. As for the semiconductor maker, details on how the company plans to use the rise of artificial intelligence, a driving force in the industry, are eagerly awaited. As for the world’s number one in luxury, according to the FactSet consensus, turnover in 2023 is expected to be 85.7 billion euros (+8.3%) and net profit of 15.7 billion (+12% approx.). With the exception of the flagship index Alten, Cegedim, Exel Industries, Getlink, JCDecaux, Manitou, Maurel & Prom, Okwind and Stef balance their level of activity, either annually or per quarter of their spread financial year.

Internationally, Dow, Intel and Visa, part of Dow Jones, report their fourth-quarter results, as do Deutsche Telekom subsidiary T-Mobile and, in Europe, Nokia.

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