(BFM Bourse) – The Paris Stock Exchange still remains anchored in the red after inflation figures which should not push the Fed to raise its rates. But caution permeates the mood of the markets on the eve of the ECB meeting and with the rise in oil prices. The CAC 40 closed down 0.4%.
The Paris Stock Exchange once again ends down. At the close, the CAC 40 contained its decline to 0.42% at 7222.57 points, after having lost almost 1% at the lowest of the session, below 7200 points.
Expected like milk on fire, the publication relating to prices in the United States for the month of August ultimately did not show any major unpleasant surprises. Inflation therefore increased by 0.6% as expected, over one month in August after an increase of 0.2% the previous month. Over one year, a slight increase in consumer prices can be seen, at +3.7%, after +3.2% in July. It is also a little more than expected, economists were counting on inflation at 3.6% over one year, according to a consensus collected by the Wall Street Journal.
This slight increase in prices over one year is attributable to the recent surge in energy prices, including oil which is trading at the highs of November 2022. Moreover, the International Energy Agency has warned that A significant shortage in the supply of black gold would be observed in the fourth quarter, which is pushing up oil prices. The November North Sea Brent contract rose another 0.2% to $92.31 per barrel, reaching its highest level since November. The October contract on WTI listed in New York advanced 0.3% to 89.07 dollars per barrel.
A final hike or a break for the ECB?
However, this small surge in prices does not panic the markets, which have found in the direction of the “core” index, that is to say excluding energy and food, a source of comfort. This decelerated to 4.3% over one year, compared to 4.7% in July.
“Underlying inflation continues its sharp decline: it has lost a percentage point in the last 3 months, which has very rarely happened over the last 40 years,” adds CPR Asset Management.
For the markets, these inflation figures would not be likely to push the American Federal Reserve to raise rates. Quoted by AFP, Nancy Vanden Houten of Oxford Economics expects that “Fed officials will ignore the rise in the CPI”. “This report does not change our opinion that the Fed will keep rates unchanged until the end of the year,” she comments.
Still on the monetary chapter, the European Central Bank will deliver its verdict on its monetary policy on Thursday. “The consensus of economists is divided on the decision and the markets assess the chances of an increase” in key rates at around 40%, Pictet Wealth Management pointed out on Friday.
The auto sector is well oriented
On the values side, we will note the good performance of the automobile sector after the announcement from the European Union which has decided to investigate the subsidies granted to Chinese automobile groups. Which also allowed the Parisian index to control its slippage. Renault gained 2.1% and Forvia 0.6%.
Red lantern of the CAC 40, Alstom, on the other hand, fell by 3.9%, penalized by Barclays which began monitoring the stock at “underweight”, the equivalent of sales at the British bank. The establishment is concerned about the railway equipment manufacturer’s cash generation, its debt, a slowdown in orders and even a downgrade from Moody’s.
On currencies, the euro lost 0.25% against the dollar at 1.0734 dollars, after the American inflation figures.
Sabrina Sadgui – ©2023 BFM Bourse