(News Bulletin 247) – The Paris Stock Exchange closed higher after lower-than-expected inflation figures in the United States. The CAC 40 thus gained 0.71%, confirming its return to 7,600 points this Thursday evening.

The consumer price index, the benchmark measure of inflation in the United States, was undoubtedly the statistic to watch today. Up 0.3% at lunchtime, the Paris stock market accelerated its gains after US inflation figures fell short of expectations.

The CAC 40 has therefore secured a second consecutive session of growth, with a gain of 0.71% and also its return to 7,600 points, at 7,627.13 points on Thursday evening.

The markets welcomed the day’s statistics with great relief. Consumer prices continued to slow in June, to 3% over a year compared to 3.3% in May, according to the CPI index published Thursday by the Labor Department. This is its lowest level since March 2021. The surprise comes mainly from the trend over a month, with prices contracting by 0.1% in June. This is the first monthly pace since 2020.

These figures thwart the consensus compiled by the Wall Street Journal, which was counting on a rise in prices of 0.1% over a month, and 3.1% at an annual rate. They also show “the moderation needed for a September cut in interest rates by the American Central Bank (Fed), says Florian Ielpo, head of macroeconomic research at Lombard Odier IM.

“The specific components of inflation that are showing signs of receding are precisely those that the Fed and the markets have been focusing on. In particular, services inflation continues to moderate, with housing inflation increasing by only 17 basis points month-on-month, compared to 40 basis points the previous month: this is the inflation most feared by the Fed and it is finally showing signs of moderation,” the expert continues.

“A second positive surprise”

“This inflation report constitutes a second consecutive positive surprise. The ‘housing’ component reassures for the continuation of the disinflation path. This, coupled with the more worrying signals on the labor market, should push the Fed to specify its schedule for reductions in key rates,” adds Bastien Drut, head of strategy and economic studies.

Today’s statistic therefore further fuels the markets’ hopes of a first rate cut as early as September. Which explains the more marked reactions on other assets after the publication of this key statistic.

On the bond market side, the yield on 10-year US debt fell to 4.18% compared to 4.29% the day before. On the currency side, the euro increased its gains, or more precisely, the dollar plummeted. The eurozone currency gained 0.5% against the greenback at 1.0860 dollars, while it had gained 0.2% before these indicators.

On the stock side, it is still very calm before the start of half-yearly publications next week. Analysts’ notes have punctuated the session this Thursday, like JPMorgan, which downgraded its recommendation on Publicis to neutral (-0.9%).

In small and mid-caps, Arcure gained 7% after announcing a more than 24% increase in its turnover over the first six months of 2024.

Oil is holding on to its gains. The September contract on North Sea Brent is up 0.4% at $85.44 a barrel while the August contract on WTI listed in New York is up 0.5% at $82.52 a barrel.