CAC40: close to equilibrium after US inflation figures

(CercleFinance.com) - The Paris Bourse is now close to equilibrium following US inflation figures and on the eve of the ECB meeting.
The CAC40 index is trading around 8040 points, down 0.10%.

After the procrastination of the last few days, the second half of the week is busy, with several important dates on the agenda, in particular the US consumer price figures released early this afternoon.

According to the Labor Department, the US consumer price index rose by 3.5% in March compared with the same month in 2023, an annual rate 0.3 points higher than in February, and in line with Jefferies' expectations.

Excluding energy (+2.1%) and food (+2.2%), two traditionally volatile categories, the annual inflation rate held steady at 3.8% last month, again in line with Jefferies' estimate.

The economist consensus expected core CPI inflation to slow to 3.7% year-on-year in March, from 3.8% in February.

The statistic is particularly closely watched by the Federal Reserve and should help determine when it will start cutting rates, a prospect that has largely contributed to the rise in equity markets this year.

With this in mind, the vigorous indicators recently published across the Atlantic have been freshly welcomed by investors worried that the central bank will postpone the start of its monetary easing.

The trend is still bullish, but the market is lacking a bit of drive", admits Christopher Dembik, Investment Strategy Advisor at Pictet AM.

The markets seem to be counting less and less on a rate cut in June, and now favor the scenario of a first reduction in the cost of money in the third quarter, i.e. in July at the earliest.

The US inflation figures will be followed tomorrow by the ECB's monetary policy announcements, which are unlikely to lead to any concrete decisions until there is clearer evidence that the disinflation process is continuing.

Other indicators on the weekend's menu include US inflation figures: industrial producer prices, due tomorrow, followed by import prices on Friday.

Investors will also be watching the kick-off of the US corporate earnings season, which will be given as usual on Friday by the major banking groups JPMorgan Chase, Wells Fargo and Citigroup.

According to analysts, good surprises would be likely to encourage a recovery in the equity markets, which seem to have lagged somewhat since the end of March after their hot start to the year.

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