(News Bulletin 247) – The Paris Stock Exchange is back on the rise, the day after a break. The CAC 40 closes above 7,400 points after US inflation figures leaving little doubt of a Fed rate cut next week.

The slack will have been temporary. The Paris Stock Exchange was back in working order this Wednesday evening, with the CAC 40 increasing by 0.39% to 7,423.40 points. On Tuesday, the Parisian market caught its breath, putting an end to a series not seen since February of eight consecutive sessions of increase.

Investors became aware in the afternoon of a major statistic in the United States, namely the consumer price index (CPI), which makes it possible to measure inflation.

These figures were generally in line with expectations. The consumer price index increased by 0.3% over one month in November, where the consensus was expecting a less strong increase, of 0.2% for the previous month. And over one year, the increase is 2.7% over one year in November, which is in line with market expectations, after an increase of 2.6% in October. In underlying data, excluding volatile food and energy items, inflation remains stable at 0.3% over one month and 3.3% over one year.

This key statistic comes one week before the publication of the American Federal Reserve’s decision on its rates. The last one of the year. “This inflation report was decisive for closing the year 2024, particularly in view of a potential rate cut by the Federal Reserve,” notes Florian Ielpo, head of macroeconomic research at Lombard Odier Investment Managers.

Rate cuts to come

According to the CME FedWatch tool, investors assess the probability of a further rate cut of 25 basis points (or a quarter of a percentage point) next week at 94.9%, compared to 88.9% the day before. and 65.3% a month ago.

“We expect a further reduction of 25 basis points from the Fed next week, but the new Fed forecasts should show a series of smaller reductions in 2025,” note ING economists.

On Thursday, the European Central Bank will hold its last monetary policy meeting of the year. A cut in key rates of 25 basis points is widely anticipated by the market.

On the value side, Publicis finished at the top of the CAC 40, gaining 3.7%. The advertising group is supported by an increase in recommendation from JPMorgan to “overweight” from “neutral” previously.

Groupe ADP on the other hand, stumbled 1.1% as Deutsche Bank lowered its advice to “hold” from “buy”.

GL Events gained 1.5% while the events group is in the home stretch to win the Stade de France concession.

On other markets, the euro fell 0.2% against the dollar to 1.0508 dollars. Oil is rising. The February contract on Brent from the North Sea advanced 1.6% to 73.32 dollars per barrel while that of January on WTI listed in New York gained 2% to 69.95 dollars per barrel.