(News Bulletin 247) – The Parisian market confirms its rebound, supported by Totalenergies. The CAC 40 closed up 0.52% despite a battery of statistics casting doubt on the monetary policy of central banks this year. Bond yields are rising.

The Paris Stock Exchange is offering itself a little respite following its biggest closing decline since the session of September 21. The CAC 40 ended up 0.52% at 7,450.63 points.

And yet, the latest statistics released today contradict hopes of a change in direction from the Federal Reserve towards lowering interest rates next year. A scenario which then fueled the end-of-year rally on the financial markets.

In France and Germany, inflation has started to rise again. In France, inflation increased slightly to 3.7% year-on-year in December, after 3.5% in November, according to INSEE. Across the Rhine, the observation is identical. Inflation also started to rise again, to 3.7%, an increase of 0.5 points compared to 3.2% in November.

These price data should force the European Central Bank “to wait a little longer before discussing rate reductions”, according to Carsten Brzeski at ING cited by AFP.

The latest statistics published in the afternoon in the United States also sowed doubt among investors regarding a rapid easing of the monetary policy of the American Federal Reserve. According to the monthly survey published by ADP, the private sector in the United States created more jobs than expected, at 164,000 in December against 120,000 consensus and after 103,000 creations the previous month. As for the essential registrations for unemployment benefits, these fell from 18,000 over one week to 202,000 new registrations.

These data published before the official employment report on Friday still demonstrate the robustness of the job market. The Federal Reserve’s minutes published Wednesday evening after the close of European markets also set the record straight a little. They showed that its members are overall much less confident than the market in the scenario of a first monetary easing from March. According to the CME Group’s Fedwatch tool, the probability of a 25 basis point rate cut in March (0.25 percentage points) has just dropped to 62%, compared to 73% last week.

And on the bond market, sovereign yields are tightening. That of the American 10-year is at the gates of 4% at 3.995% this Thursday, and the yield of the German 10-year is tending to 2.12% just like the yield of the French 10-year debt at 2.664%

On the geopolitical field, tensions are also legion, particularly in the Middle East with the liquidation in Lebanon of the number two of the political branch of Hamas, an attack in Iran and new attacks in the Red Sea. The closure of a major oil field in Libya adds additional pressure on the supply of black gold. A barrel of Brent from the North Sea, for delivery in March, rose another 0.9% to $78.98. A barrel of West Texas Intermediate (WTI), for delivery in February, rose 1.2% to $73.54.

STMicroelectronics in the viewfinder

The rebound in black gold prices therefore benefited Totalenergies (+1.2%) which will launch an “evaluation mission” on controversial oil projects in Uganda and Tanzania, EACOP and Tilenga. The French oil giant announced that it had finalized the sale of its service stations in Europe to the Canadian group Couche-Tard.

Alstom recovered some colors (+2.4%) after losing almost 10% the day before, in reaction to a negative analyst note from Barclays. The railway equipment manufacturer announced the signing of a contract in Saudi Arabia for its experimental tram project.

Nexity gained more than 3.5%, supported by a positive rating from TP ICAP Midcap which appreciates the real estate developer’s latest strategic initiative.

The red lantern of the CAC 40, STMicroelectronics, on the other hand, suffered the blow (-3.95%) weighed down by the resounding warning on Mobileye’s results. The company specializing in assistance and autonomous driving is currently plunging 26% in New York even though it has warned that its 2024 revenues will be well below expectations.

On the foreign exchange market, the euro recovered a few fractions and gained 0.3% against the dollar to 1.0957 dollars.