CAC 40: optimism continues in the wake of ECB meeting

(CercleFinance.com) - The Paris Bourse is set to continue its upward trend on Friday morning, against a backdrop of optimism about interest rate trends in the wake of the European Central Bank's (ECB) decisions, while awaiting the Fed's announcements next week.


At around 8:15 a.m., the future contract on the CAC 40 index - expiring in September - was up 12 points at 7453 points, pointing to a green start to the session.

The Paris market had ended Thursday's session with a 0.5% gain to 7,435 points after a hesitant session, with relief finally prevailing after the ECB's latest interventions.

It was a turbulent week for equity markets, however, torn between concerns over growth, weaker-than-expected US inflation figures and the ECB's rather reassuring stance.

At the end of its meeting on Thursday, the ECB cut its key interest rates by a quarter point as expected, while opening the way to further policy easing, which relieved investors.

Juliette Cohen, Strategist at CPR AM, hails "a rather accommodating speech leaving the door open for a further rate cut in October".

"The ECB's rate-cutting cycle could accelerate if growth continues to disappoint", agrees David Zahn, Head of Fixed Income for Europe at Franklin Templeton.

Despite its yo-yo movements over the past few days, the CAC 40 is currently up around 1.1% for the week as a whole.

The New York Stock Exchange also finished higher on Thursday, buoyed by press reports suggesting the still-real possibility of a 50 basis point rate cut by the Fed next week.

Following this news, the Dow Jones gained 0.6%, the S&P 500 0.8% and the Nasdaq 1%, the latter helped by the continued recovery of Nvidia (+1.8%).

Good news for the markets: Wall Street is also heading for a positive week, proving that even disappointing inflation figures no longer scare investors.

In the Eurozone, investors will be informed in the morning of the publication of industrial production figures for July, which will provide a first glimpse of the growth to be expected in the region over the third quarter.

Investors are also awaiting monthly economic indicators in the USA, including import prices and the Michigan confidence index.

On the fixed-income market, yields on eurozone government bonds are tightening in the wake of the ECB's announcements, with the 10-year German Bund at 2.15%, compared with 2.11% the previous day.

With yields rising, the euro continues to appreciate against the dollar, returning to close to 1.1080 against the greenback.

After their recent plunge the previous day, crude oil prices are rebounding on the back of a calmer climate once again settling over the equity markets.

After falling to its lowest level since the end of 2023, a barrel of US light crude (West Texas Intermediate, WTI) recovered 0.6% to nearly $69.4, giving it a 0.1% gain for the week.

Brent crude, another oil benchmark, followed suit, gaining 0.6% to $72.4.

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