(CercleFinance.com) – The Paris Stock Exchange should open on a stable note on Wednesday morning, investors limiting their risk-taking to a few hours before the highly anticipated decisions of the Federal Reserve.
Around 8:15 am, the ‘future’ contract – delivery at the end of June – on the CAC 40 index fell by barely two points to 7291.5 points, suggesting small differences at the start of the session.
The Paris market has so far posted a sluggish rebound at the start of the week (+1.1% in two sessions), driven by the conviction that the Fed will not touch its interest rates, which would be a first since the beginning 2022.
But investors are well aware that US central bank officials remain internally divided on the monetary policy verdict, which will fall in the evening.
“Several governors and the chairman of the Fed, Jerome Powell, wish (…) to take a break in June to better assess the impact of the rate hikes already adopted and the recent tensions within the banking sector”, explains César Perez Ruiz, chief investment officer at Pictet Wealth Management.
If the resistance of the American economy pleads in favor of a tightening, the ebb of inflation, again attested yesterday by the figures of consumer prices, militates him for a ‘status quo’.
Economists and analysts, however, overwhelmingly believe that the institution should wait until its meeting at the end of July to tighten its monetary policy.
“A short-term break is likely but the debates will continue to rage,” warns Emmanuel Auboyneau, associate manager of Amplegest.
In this wait-and-see context, the dollar is recovering timidly against the euro, which is back around 1.0780 after having shown some firmness since the beginning of the week in view of the ECB meeting.
On the Treasuries market, exchanges are more nervous and the yield of ten-year paper is camped below 3.84%, investors are visibly sidelined in view of the Fed’s press release.
While waiting for the Fed’s announcements, investors will learn during the day of a series of indicators that will allow them to assess the strength of the economy on both sides of the Atlantic.
Are expected, in Europe, the figures for British growth and industrial production in the euro zone, which should not reveal anything good.
In the United States, industrial producer prices for the month of May will appear at the beginning of the afternoon.
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