(News Bulletin 247) – The Paris Stock Exchange should open slightly higher on Thursday morning in the hope that the economic indicators expected during the day will confirm the trend towards a slowdown in inflation.

Around 8:15 am, the ‘future’ contract on the CAC 40 index advanced by 9.5 points to 7367.5 points, suggesting a timid recovery after two consecutive days of decline.

The Paris market closed Wednesday’s session down 0.5% to 7361 points, below the 7375 point threshold, despite the publication of rather reassuring inflation figures in the United States.

According to the Labor Department, the US consumer price index rose 4.9% in April from the same month in 2022, its lowest annual rate since April 2021.

Investors wanted to see the promise of a more conciliatory attitude on the part of the Fed and initially welcomed these announcements before the stock markets ended on a more mixed note.

On Wall Street, the Dow Jones fell 0.1% last night, while the Nasdaq Composite climbed more than 1%.

For the past few weeks, good corporate results and hopes of an ebb in inflation have been eclipsed by a climate of uncertainty characterized by a wait-and-see attitude on the part of investors.

‘It is true that the inflation figures point to a pause in Fed rate hikes’, underline the teams of Liberum, a broker based in London.

‘But the equity markets have turned down with the rise of concerns around a next recession’, explains the broker.

Faults are indeed beginning to appear within the American banking sector, which reinforces – according to analysts – the risk of a recession in the second part of the year.

In the macroeconomic department, producer prices in the United States, which will be published at 2:30 p.m., should confirm the trend of disinflation, even if we are still far from a situation of falling industrial prices.

A certain wait-and-see attitude could also prevail a few hours before the Bank of England’s monetary policy decision, the press release of which is expected at 1:00 p.m.

While the UK economy escaped recession this winter, inflation continues to surprise on the upside, meaning the BoE is still not in a position to justify stopping the rate hike cycle.

A further increase of 25 basis points is therefore expected, which would bring the total tightening since December 2021 to 4.40 percentage points, or between 0.10% and 4.50%.

Copyright (c) 2023 News Bulletin 247. All rights reserved.