The Paris Bourse (-0.2%) has practically erased all its initial losses (up to -1% this morning) and is gravitating towards 7,330 points, buoyed by encouraging European PMI figures.

The PMI flash composite index of global activity in France, calculated by S&P Global, rose from 49.1 in January to 51.6: the index is in positive territory for the first time since October 2022, and recorded its best score since last July.

However, business trends diverged markedly between sectors: manufacturers reported a fall in production for the ninth consecutive month, while service providers saw the first increase in activity for four months.
Meanwhile, according to its flash estimate, the S&P Global Composite PMI for Eurozone activity rose for a fourth consecutive month in February, to 52.3 from 50.3 in January, signalling the strongest private sector growth since May 2022.

The day was also marked by the publication of the index measuring investor sentiment in Germany, compiled by the ZEW economic research institute.
Gross domestic product (GDP) in the OECD rose by 0.3% quarter-on-quarter in the fourth quarter of 2022, compared with growth of 0.4% in the previous quarter, according to provisional estimates. OECD quarterly growth rates remained low throughout 2022 against a backdrop of high inflation and rising interest rates. In the G7, quarter-on-quarter GDP growth also slowed slightly in Q4 2022, to 0.4% from 0.5% in Q3 2022.

This result reflects a contrasting situation among G7 countries. On the one hand, growth turned negative in Germany and Italy (minus 0.2% and minus 0.1% respectively) and slowed to 0.4% in Canada and 0.7% in the USA.

In contrast, GDP rose by 0.2% in Japan after a contraction of 0.3% in Q3 2022, and remained stable in the UK after a contraction of 0.2% in the previous quarter.

In Q4 2022, OECD GDP exceeded its pre-pandemic level (Q4 2019) by 3.8%. Early estimates of annual GDP growth indicate that GDP continued to grow in the OECD area in 2022 (2.9%), but at a more moderate pace than in 2021 (5.7%) when economies were recovering from the immediate impact of the Covid-19 pandemic.

Investor sentiment improved more than expected in Germany in February, continuing the upward trend begun in the autumn: the monthly 'ZEW' index (Mannheim-based institute) stood at 28.1 this month, compared with 16.9 in January and -23.3 in December, where economists were forecasting a more limited rebound to around 23.
The sub-index measuring current conditions also improved, rising by 13.5 points to -45.1, compared with the consensus expectation of -50.
In the financial sector, expectations of a rise in interest rates are at their highest since 2004, notes ZEW Institute President Achim Wambach.

The OECD reports a clear slowdown in global activity in Q4: global GDP in member countries grew by just 0.3% quarter-on-quarter in Q4 2022, compared with 0.4% in Q1.
OECD quarterly growth rates remained weak throughout 2022: within the G7, quarter-on-quarter GDP growth also slowed slightly in Q4 2022, to 0.4% from 0.5% in Q3.

This increase masks a contrasting situation, with growth turning negative in Germany and Italy (-0.2% and -0.1% respectively), slowing to +0.4% in Canada and reaching +0.7% in the USA.

Japan stands out with a rebound of +0.2% after a contraction of 0.3% in Q3 2022, and the UK thwarts very pessimistic scenarios (-0.5% in Q4 on average) with a stable GDP (after a contraction of 0.2% in the previous quarter which should have worsened).

On the bond front, this session is going badly, with the day's figures deemed more vigorous than expected: T-Bonds are tightening by +10.5pts to 3.932% and the '1-year' is overtaking the '6-month' with a +5pt jump to 5.05% (vs. 5.034% for the 6-month), i.e. a +112pt 'spread' over the '230-year' (+7.5pts to 3.9320%, at par with the '10-year').
In Europe, our OATs jump +10pts to 3.0320%, above 3.00%, Bunds tighten +8.5pts to 2.545%, Italian BTPs shift +17pts to 4.47%.
The dollar recovers 0.35% against the euro to 1.0630.

In corporate news, payment solutions group Worldline reports a 23.4% increase in normalized EPS to 1.94 euros for 2022, as well as free cash flow of 520 million euros, or 45.9% conversion of EBITDA (gross operating profit) of 1.13 billion.

Capgemini reported a 25% increase in normalized EPS to 11.52 euros for the past year, as well as organic free cash flow generation of 1.85 billion euros, in excess of 1.7 billion, in line with its target.

Finally, Engie reports a 78.4% increase in net recurring income (NRI) group share (continuing operations) to 5.2 billion euros for 2022, as well as EBIT up 47.2% to nine billion and EBITDA up 29.8% to 13.7 billion.

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