After a rebound of almost 25% from its low point in mid-March, the Paris Stock Exchange is expected on a stable note, even slightly down. The latest estimates suggest that the health crisis will have a major impact on the world economy after the IMF warned of the worst crisis since the Great Depression of the 1930s.
Trump suspends funding to WHO
In its spring forecast released on Tuesday, the International Monetary Fund is now forecasting a 3% contraction in the world economy this year, compared with 3.3% growth estimated in January. The climate is further weighed down by Donald Trump’s announcement that the United States will suspend funding to the World Health Organization (WHO), which he accuses of having mismanaged the coronavirus epidemic. Larry Kudlow, the chief economic adviser to the White House, has also suggested that the president should make important announcements this week regarding the resumption of activity after suggesting that some states could reopen their economy by the end of the month.
Chinese central bank intervenes
In China, the central bank lowered the rate on its medium-term credit facilities to one year from 0.20 point to 2.95%, the lowest since 2014. The People’s Bank of China (PBOC) also injected 100 billion yuan ($ 14.2 billion) in cash through the facilities. ” The Fed intervened so much [en termes de stimuli] that it has given PBOC more room to lower interest rates “Said Michelle Lam, Greater China economist at Societe Generale. It also expects the central bank to lower the MLF rate, the medium-term rate for commercial banks, from 0.40 points in the second quarter.
Closer to home, the French government will revise its estimate of the total cost of the measures taken in the coronavirus crisis to 110 billion euros when the new budget forecasts are presented this Wednesday, reports Reuters citing sources within the Ministry of Finance. An amount that had more than doubled to 100 billion euros last Thursday.
New wave of US statistics
On the corporate front, Goldman Sachs (Dow Jones), Bank of America and Citigroup will release their first quarter results before the opening of Wall Street, as will health insurer UnitedHealth Group, part of the Dow Jones.
Macroeconomically, the market will monitor March retail sales to the United States, which should have recorded their largest decline since 1992, the New York Fed manufacturing activity index for April , industrial production in March, the NAHB index of real estate developer-builder confidence and weekly oil stocks. Finally, the Fed will publish its Beige Book at 8 p.m., which provides an update on the economy over the past two months.
Faurecia strengthens its liquidity
Faurecia announced that it had signed a € 800 million “club deal” on Friday with four of its main banks (BNP Paribas, CA-CIB, Societe Generale and Natixis) to deal with the coronavirus crisis.
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