Cac 40: Thanks to the slowdown in US inflation, the CAC 40 is back above 7,000 points


(BFM Bourse) – The flagship index of the Parisian market has crossed this threshold for the first time since the beginning of 2022.

It was the big meeting of the market. As expected by economists, US inflation slowed in December to 6.5% year on year, compared to 7.1% in November. Core inflation – excluding energy and food prices – stood at 5.7% against 6% the previous month.

These figures stand out exactly in line with the expectations of the experts surveyed by the Wall Street Journal.

Shortly after the publication of these figures, the CAC 40 crossed the 7,000 point mark, for the first time since February 2022. The index rose 1.16% to 7,004.79 points at 3 p.m.

The euro takes off

For its part, the euro took off against the dollar, the greenback, a safe haven on the market, suffering from the renewed appetite for risk. The euro thus appreciated by 0.4% to 1.0802 dollars.

“Regardless of the indicator chosen, this figure is much better than the previous one and inflation is moving in the right direction, which should reduce the pressure on the Fed (the American Federal Reserve)”, underlines Naeem Aslam, analyst of market at Avatrade.

The US central bank will hold its next monetary policy meeting in February. The publication of US inflation in line with the confirmed market expectations of an increase limited to 25 basis points (0.25%).

According to the CME Group’s FedWatch tool, 94% of investors (compared to around 80% before the publication of inflation) anticipate a movement of this magnitude.

“Overall, this latest report lends more weight to our view that inflation will decline faster than the Fed expects this year,” the economists at Capital Economics said.

“But the Fed is not going to stop raising interest rates until it sees evidence of easing labor market conditions and wage growth. this evidence is irrefutable”, continue the economists of Capital Economics.

Julien Marion – ©2023 BFM Bourse



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