Buyers are back in force, as the risk of Crédit Suisse going bankrupt appears to have been averted (along with the associated risk of contamination): the CAC40 has recovered +2.4% after losing 2.9% the previous day, gaining over +150pts in 2 hours (to 7,050 from 3,900 at around 2:45pm).
Wall Street's rise remains somewhat timid, with +0.5% for the Dow Jones and +1% for the S&P500.
The CAC40 was once again led by luxury goods stocks, which took the places on the podium of the biggest risers (+4 to +5%), after having fallen much less than the indices since last Thursday.
Banks, on the other hand, are having trouble resurfacing, and a phenomenon of communicating vessels seems to be benefiting the luxury giants more than ever.

European stock markets (+2% on average) reacted with undeniable composure to the announcement of a 50Pts rise in the ECB's 3 main key rates.

The European Central Bank is keeping inflation under control as a priority: while a broad consensus was expecting an increase limited to +25Pts, it raised its key rates by a further 50Pts on Thursday, and hinted at further hikes to come (although it abandoned the concept of a "sharp hike"), despite the concerns currently surrounding the health of the global financial system.

The interest rates on the main refinancing operations, the marginal lending facility and the deposit facility have thus been raised to 3.50%, 3.75% and 3% respectively.
Expectations of an increase to 4.00% are still very much in the minority, and +0.25% to 3.75% at the beginning of May seems to be a maximum.
In its press release, the Governing Council said it was keeping a close eye on current market tensions, while deeming the eurozone banking sector - which had been in turmoil the previous day - to be "resilient".

The ECB also revised upwards its growth forecasts for the eurozone - to +1% - due to lower energy prices and the economy's greater resistance to a difficult international environment.

However, the ECB also believes that inflation is likely to 'remain too high for too long': ECB economists expect it to average 5.3% in 2023, 2.9% in 2024 and 2.1% in 2025.

With regard to asset purchases, the asset purchase program (APP) will be reduced to a measured pace of around 15 billion euros per month on average until the end of June 2023, after which its pace will be adjusted over time.

The ECB does not rule out the possibility of resorting to a liquidity injection program should market tensions become alarming.

On the figures front, there was plenty of news in the USA: U.S. building permits and housing starts jumped by +9.8% in February (to an annualized total of 1.45 million), reflecting an improvement in the residential construction market, mainly thanks to vigorous activity on the country's West Coast.
On an annualized basis, i.e. compared with February, the statistics were nevertheless down by 18.4%.
The number of building permits rose by 13.8% last month, to 1.34 million units, but fell by 17.9% year-on-year.
The Philly Fed's index of current activity fell from -24.3 in February to -23.2 in March, its 7th consecutive negative reading. While the figure is a very slight improvement, it is still far from the -15.6 anticipated by the consensus.
US jobless claims fell by 20,000 in the week to March 6, to 192,000 from 212,000 the previous week, according to the Labor Department: a return to square one, on historically low levels.

Import prices fell by -0.1% for the seventh time in eight months in February, the latest indication of the ongoing disinflation process currently at work in the United States.
Over 12 months to the end of February, import prices are down by 1.1%, their first annual decline since the end of 2020, and their steepest fall since the 1.3% decline recorded in September 2020.

Interest-rate markets, which had reacted little around 2pm to the 50Pts hike announced by the ECB, are beginning to nosedive.
The markets are back in risk-on mode, which is overshadowing OATs (+10pts to 2.77%) and Bunds (+11pts to 2.225%), while Italian BTPs are only +3.5pts to 4.14%.
Note the continued decline in oil prices (-1% to $73.5 a barrel in London), which seems to indicate that recession expectations are gaining ground

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