Thus ALO French 10year performance fell 4

The note begins to be salt on equity markets. The doubt is installed and the places seem unable to stabilize and start from the front. More worrying, no serious reason explain yesterday the brutal fall of 2.91 of the French market and the significant declines in London and Frankfurt, 2.51 to 2.90, respectively. Another concern, since a few sessions, Wall Street records was also quite significant folds, from the slight erosion that had characterized his first movements of decline.

Signs of a rebound in risk aversion, long-term interest rates significantly decreased. Partly as a result of the decline in the price of a barrel of oil after the announcement of the death of the terrorist Al Zarqawi, but mostly because of the research by the operators of assets deemed to be less risky than shares. Thus, ALO French 10-year performance fell 4.02 to 3,941, while that of the Bund lost 7 basis points, 3.93. Across the Atlantic, the performance of the loan of the Tésor to 10 years lost 4 basis points to 4.97 and that of the 30 years 5 basis points, to 5.03.

In this humorous stock market context, the rehabilitation of its interest rate of 0.25 decided by the European Central Bank (ECB) did not sowed disorder. It was largely integrated into courses. At 2.75, the ECB refinancing rate recorded its third increase since December (read also page 6).

Rising inflation forecast

At the press conference that followed this decision, Jean-Claude Trichet, the Governor of the ECB, reaffirmed "monitor closely" inflationary risks. Credit and money supply growth is still worrying, according to the ECB. It noted its forecast of 2.3 euro-zone inflation this year (against a previous estimate to 2.2 established in March) and has maintained its estimate for 2007 to 2.2.

Calling the current monetary policy accommodative, the President of the ECB has felt that further interest rate rises were expected if economic recovery continues. The Institute does not mean an acceleration of growth, which the forecast is maintained for 2006 to 2.1 and lowered for 2007 to 1.8, 2 previously.

"Linguists" to market rooms have noticed that the fetish term of the ECB, "vigilance", was absent from the first paragraph of the speech, a sign that the ECB will not raise interest rates at its next meeting in July. It should wait at least the end of the summer, possibly tighten monetary policy in the view of statistics which will be published by there, and the holding of the euro, especially if it had to move again until about 1.35 dollar.

While the opportunity of a 0.50 of the interest rate hike has evoked at this meeting, it is an increase of 0.25 decided "by an overwhelming majority", but apparently not total. "The ECB does not suggest that it intends to accelerate the pace of increases." "It is satisfied to continue a gradual way," said Bruno Cavalier, Economist at Credit Agricole. Apparently, some operators had bet large enough on the assumption of an increase of 0.50, and repudiated, have sold quickly to the euro, explaining his rather brutal decline in 1,2770 to 1,2664.

Yesterday, the greenback progressed against other major currencies. A movement no doubt due in part to redemptions of positions vendors on the dollar which had been developed previously. Today, the entering should resume its good old habits and reacting to the figures of the US trade balance in April. The bond market will follow the numbers in prices Americans import and the speech of Ben Bernanke, who will speak at a Conference at the Massachusetts Institute of Technology (MIT).

For its part, the Bank of England (BoE) has maintained its interest rate unchanged, at 4.50, in line with the expectations of economists. Last modified went back to the month of August 2005. It had consisted of 25 rates basis points lower, reduced from 4.75 to 4.50.