(BFM Bourse) – The CAC 40 experienced a big brake on Tuesday after inflation certainly slowed down for the month of August in the United States but exceeded expectations.
US inflation is hurting the CAC 40. The flagship index of the Paris market erased its gains and went back into the red after the publication of this very important statistic. Around 3:45 p.m., it fell 0.7% to 6,291.56 points against an increase of around 0.5% at mid-session.
According to the US Bureau of Statistics and Labor, the consumer price index, the best-known barometer of inflation, rose 8.3% in August. An increase certainly lower than that of July (+8.5%) but clearly above the expectations of economists who were counting on a figure of 8%, according to a consensus compiled by Dow Jones Newswires.
The markets were hoping for a marked slowdown in inflation in August so that the monetary tightening that the American Federal Reserve (Fed) is in the process of operating will ease over the next few months.
“The Fed already had a restrictive bias and the release of this data will do nothing to deter it,” said Paul Ashworth, economist at Capital Economics.
“Nevertheless, with inflation expectations almost back to normal levels and growing disinflationary pressure showing up everywhere but the CPI [indice des prix à la consommation] Officially, we still expect headline inflation and core inflation to decline faster over the next 12 months than Fed members currently believe.”
The euro experienced an even stronger movement, falling 1% against the dollar, while it was rising before US inflation.
Julien Marion – ©2022 BFM Bourse