(CercleFinance.com) – The Paris Stock Exchange is expected to rise on Friday at the opening, with optimism being required before a busy session, which will be notably marked by the publication of the latest data on inflation in the euro zone.
Around 8:15 a.m., the ‘future’ contract on the CAC 40 index – delivery at the end of the month – rose more than 40 points to 7981 points, which means that the index could get a little closer to the threshold of 8000 points. at the opening.
The Parisian market seems on track to start this first session of March in the green, following on from a very favorable month of February which resulted in the setting of new records.
Over the whole week, the Parisian CAC 40 index has at this stage fallen by around 0.5% after having increased by more than 3% over the whole month of February.
While the CAC has gained 5% since January 1, investors nevertheless seem to feel the need to digest this powerful upward movement while waiting to identify what the next catalyst will be.
‘European stocks are now taking the time to reflect on the extent of their progress since the start of the year,’ explains Florian Ielpo, head of macroeconomic research at Lombard Odier Investment Managers.
On the macroeconomic front, the market will carefully follow the PMI activity indices in the manufacturing sector this morning, with the hope that these figures confirm the slight improvement currently taking shape in European industry.
But investors will especially be watching, at 11:00 a.m., for the publication of preliminary data on inflation in the euro zone, on the lookout for the slightest indication on the timetable for the ECB’s next rate cuts.
If disinflation is expected to resume its course, price moderation should not constitute a sufficient argument for rapid monetary easing by the ECB, which will meet next week.
On the bond market, relaxation remains in order after the latest US inflation figures, which yesterday convinced investors that the cycle of rate cuts was approaching in the United States.
‘January PCE inflation supports our view that the Fed’s preferred measure of inflation will return to its target levels by mid-year, which should allow the central bank to cut rates by a larger magnitude than investors currently expect,’ says Capital Economics.
The yield on ten-year Treasuries fell towards 4.25%, while the German ten-year rate fell to 2.41%.
The session also promises to be lively this afternoon on Wall Street, where the ISM manufacturing index as well as the consumer confidence index from the University of Michigan will be published.
While stakeholders may need new catalysts to maintain the momentum of recent weeks, the uptrend still remains intact in the markets, strategists say.
In these conditions, the recent peaks reached on the world stock markets should constitute only a simple step in the framework of a more lasting upward wave, they add.
‘From a technical point of view, if the craze continues, the current rise in the CAC 40 could continue towards 8,250 points before being subject to a breather’, predict the teams at Admirals Group, a broker for individual investors and professionals.
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