CAC40, : back on track, unsurprising US CPI at +2.7

(CercleFinance.com) - (CercleFinance.
com) - The Paris stock market gained a few fractions (+0.3 to +0.4%), as the CAC40 began its ascent from 12:00: it is now hovering on either side of 7425pts.

Calm prevails, and the tone had already been set this morning by the Tokyo Stock Exchange (+0.01%, the smallest positive gap for a 7th rise in a series of 8).

The Euro-Stoxx50 was no more inspired, with +0.2% around 4960, reflecting a wait-and-see attitude ahead of the publication of US inflation figures and the meeting of the European Central Bank (ECB).
CPI is a non-event: according to the Labor Department, it came out in line with expectations at +2.7%, up 0.1 points on October.

Excluding energy (-3.2%) and food (+2.4%), two traditionally volatile categories, the underlying annual inflation rate came out at 3.3% last month, a level also in line with economists' forecasts.
On a sequential basis, i.e. between October and November 2024, US consumer prices rose by 0.3%, both unadjusted and excluding energy and food.

The suspense now remains regarding tomorrow's ECB meeting: the market believes that the ECB should opt for a further 25 basis point cut in its main key rates.

However, analysts believe that the key element of the meeting will be the Frankfurt-based institution's updated economic forecasts.

A possible upward revision of the growth estimate for the eurozone, currently set at 1.3% for 2025, could herald an acceleration of the monetary easing currently underway.

'If the ECB removes from its statement its famous phrase "rates will be kept sufficiently restrictive for as long as necessary", this will herald a new objective for the ECB to rapidly lower its key rate to its neutral level', analyzes Patrick Barbe, at Neuberger Berman.

On Wall Street, US equity markets lined up for a second session of gains, with futures indicating a pre-opening rise of +0.3 to +0.5%.
According to CME's FedWatch tool, markets estimate the chances of the Fed making another rate cut in a week's time at over 86%.

The bond market was little changed, with the spread widening by +1Pt to 77Pts between the yield on ten-year German Bunds (2.105%, i.e. -1.5Pt) and that on OATs of the same maturity (2.872%, i.e. -0.5Pt), which remained perfectly stable at 76 basis points.

On the other side of the Atlantic, the yield on ten-year Treasuries, the benchmark for US borrowing costs, rose by +1.5 basis points to 4.238%.
The dollar continues to recover, with a spread of +0.3%: the $-Index is up +0.3% at 106.80, while the euro is down -0.3% at 1.0495.

On the energy market, oil prices are maintaining their bullish bias ahead of this afternoon's release of weekly US oil inventory data. Brent crude advanced by 1.2% to $72.9 a barrel.

In French company news, STMicroelectronics unveiled on Wednesday the first product to emerge from its strategic collaboration with US company Qualcomm, a new component designed to simplify the development of wireless applications for the industrial and Internet of Things (IoT) sectors.

ArcelorMittal announced on Wednesday the launch of a bond issue for a total amount of one billion euros, to be used in particular to refinance its debt. Two tranches of 500 ME maturing in 2028 and 2031 will be issued, with coupons of 3.125% and 3.50% respectively.


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