CAC40: steady ahead of US inflation data

(CercleFinance.com) - The Paris Bourse began the session without much direction on Wednesday, in a cautious mood ahead of the release of new US inflation data and tomorrow's meeting of the European Central Bank (ECB).
The CAC 40 index is close to equilibrium at around 7,410 points.

While the Paris market had lost more than 0.2% yesterday, at 7,407 points, the Nasdaq managed on Tuesday to post a second consecutive session of gains, the first in almost a month, by recovering 0.8%.

To confirm this nascent rebound, all eyes will turn, at 2.30pm, to the publication of the US Consumer Price Index (CPI) for August, which should confirm the gradual slowdown in inflation.

The rise in the CPI is expected to be stable at 0.2% compared with the previous month, as is the much-watched underlying inflation, which should also remain unchanged at 0.2%.

This data promises to be all the more crucial as it comes a week before the Fed's next monetary policy meeting.

With the market still torn between a quarter-point or half-point rate cut on Wednesday September 18, these figures could greatly influence investor expectations.

Even if market participants are now more concerned about the evolution of the labor market, a further deceleration in inflation would bolster the case for further monetary easing.

Traders currently have a 65% probability of a 50 basis point cut, and a 35% probability of a 50 basis point cut, according to CME Group's Fedwatch barometer.

Investors will also be watching Wall Street's reaction to the first debate between the two US presidential candidates, in which Democrat Kamala Harris appears to have been more convincing than her Republican rival, Donald Trump.

According to a poll cited by Danske Bank analysts, the US vice-president largely dominated this first televised duel in the run-up to the November 5 vote, with 55% of viewers awarding her victory against 45% for the Republican candidate.

By way of comparison, in a poll taken before the confrontation, Kamala Harris had only 49.5% of voting intentions, compared with 50.5% for the New York businessman.

While Trump focused on the failures of the current administration, Harris unveiled a more forward-looking vision", Danske Bank's teams decrypt.

"Where Trump's speech lacked clarity regarding his plans on key issues such as immigration, Harris stood out for her firm positions on abortion, the rule of law and foreign policy vis-à-vis the wars in Ukraine and Gaza", the strategists add.

"The general tone of Trump's remarks appeared dark and threatening, while Harris appeared more optimistic about the future", concludes the Danish establishment.

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