On the eve of the so-called "Day of the 4 Witches", the Paris stock market ended the session with a gain of 1.19%, at 7308 points, driven in particular by Alstom (+4.6%), Bouygues (+2.5%) and URW (+2.4%).

With the ECB announcing its 10th rate hike, to 4%, investors seem to have been reassured by the bank's very transparent communication, which hinted that this could well be the last tightening.

In a press conference, Christine Lagarde hammered home the point that current rates are likely to be maintained until inflation convincingly approaches the 2% target (which could be reached in early 2026).

The central bank took advantage of the meeting to update its forecasts. Thus, 'in view of the increasing impact of monetary tightening on domestic demand and the slowdown in international trade', it significantly reduced its economic growth projections to 0.7% in 2023, 1% in 2024 and 1.5% in 2025.

Inflation is also revised upwards for 2023 and 2024, to 5.6% (vs. 5.3% previously) and 3.2% (vs. +3% previously) respectively, but downwards for 2025, to 2.1%.

Core inflation (excluding energy) is revised slightly downwards, to 5.1% on average in 2023, 2.9% in 2024 and 2.2% in 2025.

Christine Lagarde notes that activity in the 'services' sector is down sharply, that banks are lending less readily, that business demand is down (-3% year-on-year vs. -2.2% at the end of the 1st half), and that lending to individuals is down (-1.7% since January 1, -0.8% over June/July/August).

The 'M3' money supply (including credit) is contracting by -0.5% this year, with food inflation remaining above 6%.

According to official statistics published on Thursday, retail sales in the United States rose by +0.6%, well above the 0.2% expected in August. The Commerce Department points out that the rise in fuel prices largely contributed to this increase.

Excluding autos and fuels, retail sales rose by just 0.2%.

This sign of the resilience of the US economy could potentially prompt the Federal Reserve to continue on the path of monetary tightening at the end of its meeting next week.

Especially as US producer prices rose by +0.7% (instead of +0.2% expected) due to the recent upturn in oil prices. The price of a barrel of WTI rose by 1.3% to $90, while a barrel of Brent crude traded at $93.5 (+1.4%).

On the employment front, the number of jobless claims in the USA rose by 3.000 in the week to September 4, to 220,000 according to the Labor Department, compared with 217,000 the previous week (revised from 216,000).

Following the ECB's announcement, European bond markets eased to 3.12% for OATs and 2.59% for Bunds. US T-Bonds moved in the opposite direction with +1.2Pt to 4.27%, weighed down by producer prices and rising consumption.

The dollar benefited from the wide gap in EU/US yields, climbing +0.7% to $1.0655/E.

In news from French companies, Assystem reports net income of 21 million euros for the first half of 2023, down from 32.7 million a year earlier, and operating income down 4.3% to 15.7 million, representing a margin down 1.2 points to 5.6%.

Esker reported net income down 26% to 7.5 million euros for the first six months of 2023, with operating profitability of 11.2% on sales of almost 87.9 million, up 15% (+16% at constant exchange rates).

Lastly, TotalEnergies has announced the launch of a tender for the supply of 500,000 tonnes per year of green hydrogen, so as to avoid the emission of around five million tonnes of CO2 per year in its European refineries by 2030.

TotalEnergies also announced that it had signed an agreement with Air Liquide for the long-term supply of green, low-carbon hydrogen to its Gonfreville platform, to reduce the site's annual CO2 emissions by up to 150,000 tonnes a year.

Finally, JCDecaux announced this evening that it had won the self-service bicycle contract for the city of Toulouse (4th largest city in France), following a call for tenders.


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