(News Bulletin 247) – The Paris Stock Exchange closes up 0.7% supported by a decline in oil prices and the prospect that the Fed will maintain its key rates at their current level.

The Paris Stock Exchange has picked up the pace in the wake of the opening of the American markets. Up 0.4% at midday, the CAC 40 rose 0.67% at the close on Wednesday, thus confirming its reconquest of 7,300 points (7,330.79 points).

In New York, the Dow Jones therefore rose by 0.55%, the S&P 500 by 0.2% while the Nadsaq was down by 0.3% before the monetary policy decision of the American Federal Reserve. According to the CME Group’s FedWatch tool, investors assign a 99% probability to maintaining key rates at their current level, i.e. in a range between 5.25% and 5.50%.

“Above all, the markets will look closely at the new key rate projections from Fed members which could indicate fewer rate cuts in 2024,” adds Xavier Chapard.

A lull in the bond market

This serenity is reflected in bond rates, the yield on the American 10-year is down to 4.327% after reaching a 16-year high on Tuesday while that of the 10-year OAT contracts to 3.235% and the Bund of the same maturity at 2.702%.

In addition to this pause on the bond market, the lull in oil prices also supported the progression of the CAC 40. The North Sea Brent contract for November remains at $94 per barrel after dropping 1%, while the October one on WTI listed in New York is trading at $90.61 per barrel.

“We think that the rebound in oil is exaggerated, reinforced by the repositioning of investors who were negative until recently, and our scenario predicts that oil prices return towards 85 dollars per barrel in the short term,” estimates Xavier Chapard of LBPAM.

“The decision (…) of the Fed on interest rates provides the perfect excuse” for profit-taking, explains Tamas Varga of PVM Energy, cited by AFP, especially since the WTI contract for October expires.

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Small air hole for Air Liquide

On the stock side, Air Liquide lost 1.6% while Stifel sees “short-term challenges” for the stock and considers that the consensus on the company’s sales for the third quarter is now “demanding”.

Outside the CAC 40, Ubisoft limited its gains to 2.1% after gaining more than 6% driven by the good commercial start of the new part of the series “The Crew”.

On the smaller capitalization side, Visiativ plunged 12.8%, weighed down by half-year accounts marked by a sharp deterioration in profitability.

On foreign exchange, the euro gained 0.3% against the dollar to 1.0716 dollars.