The Paris stock market continued the rebound it began yesterday, gaining nearly 1.5% around 7,120 points, as concerns about the health of the global financial system eased.

Indeed, the concerted action of the central banks of the world's major economic powers, which have declared their readiness to stabilize markets and prevent any drying-up of credit, seems to have calmed the storm in the financial markets.

Christine Lagarde, President of the ECB, assured us yesterday that 'financial tensions could temper demand and do some of the work that would otherwise have been done by a restrictive monetary policy: without these tensions, we would have indicated that further rate hikes were necessary'.

In other words, the rate hike cycle may well be over, since restrictive policy is no longer necessary in view of the already tight financial conditions on the markets.

As one London trader summed up yesterday, 'the risks surrounding the banking system have become more important than monetary policy objectives'.

As a result, the risks seem to have diminished, with investors coming to terms with the prospect of more accommodative monetary policies without too many problems.

The European banking sector also had a good day yesterday, with the STOXX Europe 600 Banks sector index rebounding by more than 1.2% after starting the day in the dark red.

While growing fears about the banks have fuelled market volatility in recent days, investors are now awaiting announcements from the US Federal Reserve.

Given the prevailing nervousness, markets remain on tenterhooks for the Fed's decisions, which will fall on Wednesday evening and be followed by a press conference from Fed Chairman Jerome Powell.

According to CME Group's FedWatch barometer, investors' estimated probability of a 25bp rate hike hovers around 77%, while only 23% of investors expect no change.

On the macroeconomic front, market participants will be paying close attention to the publication of Germany's ZEW investor sentiment index later this morning, followed by the release of US housing sales data this afternoon.

In company news, the Mr.Bricolage share gained almost 4% in Paris following the announcement of a planned purchasing partnership with the UK's Kingfisher.

Air Liquide announced that it will invest around €60 million to modernize two air separation units (ASUs) that the French industrial group operates in the Tianjin industrial basin in China.

On Tuesday, Colas announced that it was investing in the French start-up XXII, with a view to accelerating the use of computer vision in artificial intelligence (AI).

Finally, Sopra Steria announced that it had reached a conditional agreement to launch a takeover bid for all Ordina shares at a price of 5.75 euros per share (excluding the proposed dividend), representing a premium of 36% over the closing price on March 14.

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