(CercleFinance.com) – The Paris Bourse is kicking off what could be the 23rd week of the upward cycle that began on September 29 with a bang.
The Euro-Stoxx50 (+0.5%) also started the week with an annual record and a ‘highest’ since January 6, 2022, at 4.324Pts
The CAC40 – once again boosted by luxury stocks – broke a new absolute record at 7,400 Pts after a few minutes of trading (+0.7% at that time)… but this crossing of historical resistance ‘n ‘did not take’!
No wave of algorithmic purchases, no massive hunt for ‘stops’: on the contrary, skeletal volumes: a rise – without opposition – in a sidereal vacuum.
However, the CAC40 gained 0.4% 30 min from the reopening of Wall Street (an increase of 0.3% expected on the 3 main US indices), continuing its rebound of the past week pending the US employment report , whose publication on Friday will be the highlight of the week.
For the month of February, economists expect only 220,000 job creations after the 517,000 announced in January.
Investors will be on the lookout for any sign of a more pronounced slowdown in the labor market after the better-than-expected indicators released in recent weeks.
As in previous months, stakeholders’ attention will also be focused on the rise in wages, the strength of which is considered worrying because it heralds the persistence of inflation over time.
A lower-than-expected figure could be welcomed by market participants as it would confirm the likelihood of future rate hikes limited to 25 basis points.
According to the CME Group’s FedWatch Barometer, the market is currently pricing a little over 75% chance of a quarter-point hike after the March 22 meeting, and less than 25% for a an increase of half a point.
The reaction of the markets to the US employment figures will therefore prove decisive in view of the meetings of the major central banks expected in the coming weeks.
In this perspective, the hearing of Jerome Powell, the chairman of the Federal Reserve, by the American parliamentarians tomorrow and Wednesday will also be particularly followed.
The Fed boss will no doubt be questioned about the latest statistics, which showed economic activity much stronger than expected, and about the persistence of inflation in the United States.
In Europe, retail sales rose less than expected in the euro zone in January, suggesting that price increases are weighing on household demand.
Retail sales in the 20 countries sharing the single currency increased by 0.3% in January compared to December, but were down 2.3% year on year, according to Eurostat statistics.
Economists were expecting a stronger rebound in consumption in January, around 0.6%, after the 1.7% drop recorded in December.
By sector, the strongest contribution came from sales of food, beverages and tobacco (+1.9%), followed by food products (+0.8%), while fuels fell by 1.5%.
In geographical terms, the largest increases were recorded in the Netherlands (+4.9%), Luxembourg (+4.6%) and Slovenia (+4.1%) and the largest decreases in Austria ( -9.8%), in Slovakia (-1.4%) and in Hungary (-0.6%)
In Asia, the stock markets were rather well oriented on Monday despite the latest disappointing growth projections unveiled by Beijing. The Hong Kong Stock Exchange took 0.4% and that of Tokyo 1.1%.
China has set a growth target of 5%, according to a government work report presented on Sunday to the national legislature for deliberation, where the consensus of economists had hoped for up to 6%.
In the bond market, the time is calm after the severe turbulence of the previous week and the Eurozone benchmark yields are trending lower after recently hitting their worst levels in 12 years.
After four weeks of increases, the yield of the ten-year German Bund fell -5Pts to 2.671% while the French ten-year relaxed by -5Pts to 3.149% after reaching 3.25% last Thursday, 3.21% Friday night.
The US 10-year rate is also falling, from 3.965% to 3.917%, after having exceeded 4% last week, but this reference rate should not fail to start moving again as Friday’s employment figures approach. .
The barrel of ‘Brent’ oil consolidates marginally, just below the $85 threshold in London, but confirms its exit from the medium-term downward channel, validated last Wednesday: no upward acceleration detectable at this stage but beware of any temporary decrease in supply globally.
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