After a morning of slight declines, followed by a return to equilibrium at mid-session, the Paris Bourse stalled in the final hour of trading: at the final gong, the Paris index lost 0.99% to 7,984 points, heavily penalized by the automotive sector, with Stellantis down 10% and Renault down 5.5%.

On the eve of the May 1st bank holiday - which will see continental Europe's main stock markets remain closed - the day's trading session promises to be rich in economic statistics, starting with inflation on the old continent.

The eurozone's annual inflation rate is estimated at 2.4% in April 2024, stable in relation to its March level, according to a flash estimate published at 11am by Eurostat, the European Union's statistical office.

Meanwhile, in the first quarter of 2024, seasonally-adjusted GDP rose by 0.3% in the eurozone and the EU, compared with the previous quarter, according to the preliminary flash estimate published by Eurostat, the statistical office of the European Union.

Earlier in the morning, investors had taken note of France's gross domestic product (GDP), which grew moderately in the first quarter of 2024 (+0.2% after +0.1% in the previous quarter), according to the first estimate (seasonally and working-day adjusted) from INSEE, with inflation slowing to +2.2%.

In Germany, GDP grew by 0.2% in the first quarter of 2024 on a sequential basis, in volume and seasonally adjusted data, according to a first estimate from Destatis, following a 0.5% decline in the fourth quarter of 2023.

On the bond market, all the previous day's gains were lost, and then some: our OATs (+6.1pts to 3.085%) returned to their worst levels of the year, as did Bunds (+6.2% to 2.588%), while Italian BTPs fell back 6pts to 3.879%.
No better on the other side of the Atlantic, where T-Bonds are down +5.5pts at 4.669%, and 2-year bonds are up +5pts at 5.023%.

The markets are still facing the uncertainties surrounding the tone of the Fed's statement to be published tomorrow evening.

No rate change is expected on this occasion, but market participants will be dissecting the language relating to inflation: this was almost unthinkable 3 months ago, but the hypothesis of zero rate cuts in 2024 and one hike in January 2025 (in 9 months' time) now attracts 33% of votes, while a 1st rate cut in September is marginally in the majority.

The past few weeks have been clearly marked by a spectacular downward revision of US rate cut expectations for 2024, from seven to potentially zero.

The dollar has taken advantage of this to strengthen a little against the euro this year (the euro is down -0.2% at 1.0700, or -3% since January 1), and a lot against the yen (-0.7%), which is down at 157.5/$ (-12% this year).

Brent crude oil consolidates by -0.8%, but remains anchored at or above $88 in London ($87.8).

The session is also punctuated by numerous quarterly corporate publications on both sides of the Atlantic.

In the news for French companies, Air France-KLM reported a net loss of 480 million euros for the first three months of 2024, down 143 million year-on-year, with an operating margin down 2.5 points to -7.4%.

Stellantis reported this morning net sales of 41.7 billion euros for the first three months of the year, down 12% year-on-year. By way of comparison, consensus was expecting sales of around €43.5 billion.

Thales reports sales of €4,421 million for the first quarter of 2024, compared with €4,026 million for the first quarter of 2023, up 9.8% on a reported basis, and 7.9% on a like-for-like basis.

Chargeurs posted first-quarter 2024 sales of €177.8 million, up 6.7% on a reported basis and 10% organically, with all divisions contributing to this organic growth.

Lastly, Arnaud Lagardère, Chairman and CEO, today informed the Directors of Lagardère SA of his indictment. He is contesting the decision and will lodge an appeal. This indictment essentially relates to facts concerning personal companies that belong entirely to him, and does not involve any Lagardère Group company.


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