OPEC+ did not discuss Russia’s exclusion from production deals, the Cac 40 turns red at the end of the session, market news

the bedroom 40 ends 0.77% lower at 6,418.89 points after gaining just over 0.6% on the session. The Paris Stock Exchange’s flagship index suddenly crashed just before 4 p.m., according to information from the Reuters agency, which, citing four sources, said that during the technical meeting held today, OPEC+ was ahead of the big decision-makers, who had planned for tomorrow, had the idea , to exclude Russia from the production contracts, not discussed. In the report, oil prices pared losses with Brent rising to $118 a barrel from $116 this morning. Crude oil prices were at their highest level in two and a half months yesterday (above $122 for Brent) after the European Union decided to embargo Russian oil. Meanwhile the Wall Street JournalCiting cartel delegates, reported that some OPEC members were considering suspending Russia from the deal as Western sanctions hurt the country’s ability to produce more.

On Wall Street, the Dow Jones and the S&P500 giving up just over 0.7%.

The ECB under pressure to act quickly and decisively

Poor macroeconomic indicators in the eurozone fueled growth fears in an environment already weakened by a record one-year inflation rate of 8.1% in the region. In Germany, where consumer price inflation hit 8.7% year-on-year, retail sales fell 5.4% in April, the biggest drop in a year. More broadly, manufacturing activity growth slowed in the euro zone last month, with the PMI index released by S&P Global hitting an 18-month low of 54.6 points, compared to 55.5 in April.

For Chris Williamson, chief economist at S&P Global“More uncertainty surrounding the economic outlook and related to the Russian invasion of Ukraine, as well as persistently high inflation and supply pressures, is leading to greater risk aversion and a slowdown in consumer spending, increasing downside risks for Euro Zone manufacturing” .

Economists fear that rising prices will force central banks to act more aggressively. This was stated in particular by Robert Holzmann, the governor of the Austrian central bank and a member of the Governing Council “Lack of decisive action” Inflation expectations could become unanchored. And to add a “Rise by 50 basis points [en juillet] would send the necessary clear signal that the ECB is serious about fighting inflation. For their part, economists at Deutsche Bank expect ECB interest rates to rise by 50 basis points by September, becoming the first bank to do so.

The Fed tackles the reduction of its balance sheet

In the United States, the Federal Reserve will start reducing its balance sheet by nearly $9 trillion this Wednesday (the central bank will not reinvest the amount of maturing bonds). It will first decline by $47.5 billion per month before doubling that amount to $95 billion from September. Traders are also expecting a 50 basis point hike in Fed interest rates during the next two policy committee meetings.

Opinions remain divided within the institution, with Gov. Christopher Waller calling for a continuation of monetary tightening by half a notch to ensure inflation is contained, while other officials including Atlanta Fed President Raphael Bostic have said they should believe a break could come in September. In the evening, the Fed will publish its Beige Book, which will take stock of economic developments in the central bank’s 12 districts. For its part, the Bank of Canada raised interest rates by 50 basis points to 1.5% on Wednesday.

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