(CercleFinance.com) – The Paris Stock Exchange begins Wednesday morning’s session in decline, with investors taking a break after the sharp rise of recent weeks while awaiting monetary policy decisions from the American Federal Reserve. The CAC40 index falls back by 0.6% towards 8150 points.
At the end of a two-day meeting, the Fed will publish a press release this evening which will be studied closely by stakeholders to try to get an idea of the date on which the central bank will decide to lower its rates.
Market participants will carefully scrutinize the announcements from the Washington-based institution in search of precise clues on the timetable for the next monetary easing.
The president of the authority, Jerome Powell, will also speak at his traditional press conference.
Traders currently see a 60% chance that the Fed will cut rates in June, according to the CME Group’s FedWatch barometer, but their optimism could be undermined after the meeting.
Investors will be particularly attentive to new forecasts on the evolution of rates, the ‘dot plots’, with the risk that expectations of a next rate cut will be postponed again in time.
‘The median scenario should still point to three rate cuts in 2024, but only just,’ warn Bank of America strategists.
For many analysts, the Fed is forced into inaction due to the good performance of the American economy, which is accompanied by a resurgence of inflation.
‘Both the Fed and the ECB would like to see continued disinflation before starting to lower their rates,’ recalls Amaury d’Orsay, head of bond markets at Amundi.
‘Given the recent trend in underlying services inflation in the United States, it makes sense for them to be patient,’ the manager continues.
Traditionally, investors prefer not to take too strong buying or selling positions before the Fed’s decisions so as not to find themselves caught in the wrong direction.
On the bond market, the yield on ten-year American Treasuries fell slightly, below 4.30%, ahead of the Fed’s decisions. That of the German Bund of the same maturity remains unchanged at 2.45%.
Crude prices fell a little after their annual highs reached the day before, pending the publication by the American Energy Information Agency (EIA) of crude stocks in the United States, scheduled for the post- noon.
With a limited decline of 0.2% to 87.2 dollars, the price of a barrel of Brent remains above its resistance of 87 dollars. American light crude (West Texas Intermediate, WTI) fell 0.4% to around 83.1 dollars after approaching 83.5 dollars on Tuesday, its highest since the end of October.
On the value side, Kering warned last night that its turnover would fall sharply in the first quarter, weighed down by the poor performance of its Gucci brand, a warning which caused its stock to fall nearly 13% and led to the entire luxury sector in its wake.
Citing a ‘difficult’ economic situation, the group indicated that its turnover should fall by around 10% on a comparable basis in the first quarter compared to last year.
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