(News Bulletin 247) – The Paris Stock Exchange should start on a hesitant note on Tuesday at the opening of a session which will be marked by the publication of highly anticipated inflation statistics in the United States.

Around 8:15 a.m., the ‘futures’ contract on the CAC 40 index – delivery at the end of February – advanced by 6.5 points to 7218 points, announcing the start of the session around equilibrium.

The downward movement that began last week on equities was interrupted yesterday with a rebound of more than 1.1% for the CAC, which is still above its major short-term support of 7105 points.

Wall Street also got the week off to a good start, as the S&P 500 index posted its worst weekly performance in nearly three months last week.

But a certain caution should prevail on Tuesday a few hours before the inflation statistics in the United States, which could consolidate the rebound at the start of the year, or on the contrary put an end to it.

The US Department of Labor is due to publish monthly consumer price statistics at 2:30 p.m. (Paris time), a highly anticipated meeting given the recent resurgence of inflation and the rise in interest rates.

Higher-than-consensus numbers could support higher government bond yields and rekindle fears of further monetary policy tightening by the Federal Reserve.

After peaking at 9.1% on an annual basis in June, the annual inflation rate now seems to have passed its peak, since it stood at 6.5% in December.

Due to the recovery in prices at the pump, which rose 10% in one month, the consensus expects inflation to accelerate to +0.5% in January, but the statistics should slow to 6, 2% on an annual basis.

Good price control would confirm the scenario of a ‘soft landing’ for the economy currently favored by investors, namely a decline in inflation accompanied by a slowdown in growth, but without falling back into recession. .

According to this ‘goldilocks’ pattern, growth would be neither too sluggish nor too high and liquidity neither too scarce nor too abundant, an environment that the markets appreciate and which allows them to rise quietly.

But some pessimists point out that inflation is still far from over.

‘Disinflation is certainly underway, as Jerome Powell has acknowledged in his recent speeches, but it is not uniform: very strong for energy, slower for most goods, non-existent for
services’, underline the Oddo BHF teams.

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