Potential Decline in Paris Bourse due to Poor Chinese Indicator and Euro Zone Activity Indicators

Posted Sep 5, 2023, 8:36 AMUpdated on Sep 5, 2023 at 8:38 am

The Paris Bourse is expected to extend its decline from the day before, a poor Chinese indicator having chased away the wave of optimism aroused the day before by good news from the country’s real estate sector. The market is also preparing for a series of activity indicators in the services sector in the euro zone as well as the reopening of Wall Street, closed yesterday for Labor Day.

In Hong Kong, the Hang Seng fell 1.8% as the close approached, while the Chinese CSI lost 0.8%. In question, the decline in the PMI-Caixin services index for the third consecutive month in August. At 51.8 points, after 54.1 in July, the index is at its lowest level of the year, the weakness of demand continuing to weigh on the economy, while the support measures have for the instant not enough to boost consumption.

A simple relaxation of overregulation

The recent measures announced by Beijing had revived hopes of a stabilization of the Chinese economy. ” To be fair, China’s actions so far are a mere relaxation of overregulation that may just halt or slow further damage, and not particularly supportive actions that may end it. “Comments Charu Chanana, market strategist at Saxo in Singapore, quoted by Reuters. It should also be noted that the ailing real estate developer Country Garden would have paid coupons on two dollar bonds, initially due last month, while the grace period granted expired on Tuesday, reports Bloomberg.

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On the monetary side, the Australian central bank (RBA), as expected, kept its key rates unchanged at 4.1% for the third consecutive month. In its statement, the RBA nonetheless indicates that further tightening of monetary policy may be necessary to ensure that inflation returns to the target within a reasonable period of time.

Towards a joint venture between Air France-KLM and Airbus

Beyond the activity indices in services in the euro zone, the market will take note of the July producer price index in the region, as well as industrial orders for the same month in the United States.

Air France-KLM and Airbus have announced that they have entered into exclusive negotiations with a view to establishing a joint venture dedicated to the worldwide supply of Airbus A350 component maintenance services.

Renault. Ampère, the group’s future electrical entity, could be valued at 10 billion euros when it goes public next year, chief executive Luca de Meo told the Financial Times.

Among the analysts’ notes, Berenberg raised Sanofi from “hold” to “buy”. Goldman Sachs downgraded Crédit Agricole from “neutral” to “sell”.

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