CAC40: starts the week with an anecdotal decline

(CercleFinance.com) - The Paris Bourse ended the first session of the week with a limited decline of 0.
2%, to 8148 points, penalized in particular by declines in Teleperformance (-2.4%) and Pernod Ricard (-1.6%).

The week ahead will be punctuated by the monetary policy meetings of several major central banks, including the Fed... but there are unlikely to be any surprises.

The markets will nevertheless be on the lookout for the slightest revealing indication of the timetable for future interest rate cuts (which could be limited to 3 this year).

Many analysts believe that the central bank could revise upwards its outlook for economic growth and inflation, meaning that there is still no urgency to cut rates.

If the market comes to expect fewer rate cuts, or if rate hikes start to be priced in (a very low risk in our view), risky asset prices will undergo a pronounced readjustment", warns Nanette Hechler-Fayd'herbe, strategist at Lombard Odier.

In addition to the Fed, the Bank of England (BoE) and the Swiss National Bank (SNB) will also meet this week, and again no rate changes are expected from these two central banks.

The surprise could come from the Bank of Japan (BoJ), which, according to market rumours, intends to normalize its monetary policy by raising the cost of money and ending negative interest rates.

Like other European markets, the Paris market has enjoyed an unprecedented 20-week bull run over the past three months, a momentum which enabled it to climb a further 1.7% last week and set new all-time highs.

This euphoria has led Robeco analysts to say that Eurozone equities are 'defying gravity', despite an economic climate of 'stagnation' but 'full employment'.

Against this backdrop, investors will be paying particular attention on Thursday to the publication of preliminary PMI indices for the major economies of the Old Continent.

'From an economic cycle point of view, a nascent recovery in the global manufacturing cycle could particularly benefit Europe and generate value', acknowledges strategist Peter van der Welle.

Robeco notes that European equity markets seem to have already priced in a full manufacturing recovery, which has yet to happen and may well not.

In today's statistics, annual inflation in the eurozone stood at 2.6% in February 2024, down from 2.8% in January, and in the European Union at 2.8% after 3.1%, according to Eurostat.

According to initial estimates, the eurozone recorded a surplus of 11.4 billion euros in its trade in goods with the rest of the world in January 2024, compared with a deficit of 32.6 billion euros in January 2023.

Bond markets continue to deteriorate, with +2Pts on Bunds and +1.5Pts on our OATs (at 2.892%) and +3.5Pts on US T-Bonds at 4.34%.

In news from French companies, TotalEnergies announces that it has signed an agreement to acquire 100% of Talos Low Carbon Solutions (TLCS), a pioneering US company in the carbon capture and storage sector.

TotalEnergies has also announced that it is joining forces with seven major international companies to create an international coalition to support the development of the industrial sector and the use of e-gas (e-NG), a synthetic natural gas produced from renewable hydrogen and CO2.

Thales announces that it will equip Cibao International Airport in the Dominican Republic with a new air traffic control radar system.

Finally, Fnac Darty announces the launch of a ?500 million senior bond offering due 2029 and a cash buyback offer for its existing senior bonds due 2024 and 2026.

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