The Paris Stock Exchange experienced a 0.3% decline, influenced by a higher-than-expected Consumer Price Index (CPI) for January. The Euro-Stoxx50 and major US indices also anticipate lower openings as inflation concerns persist, prompting speculation about delayed monetary easing by the Federal Reserve. Additionally, rising tariffs and bond yields are affecting market sentiments, while companies like Carrefour and TotalEnergies are making strategic moves in the market.
Market Overview: Paris Stock Exchange Takes a Hit
The Paris Stock Exchange has seen a slight downturn, dropping by 0.3% towards the 8,000-point mark after a morning of minimal fluctuations around the equilibrium point of 8,025/8,030. This decline comes in the wake of the latest Consumer Price Index (CPI) release for January, which has raised concerns due to figures significantly exceeding expectations.
US Inflation and Global Market Reactions
The Euro-Stoxx50 index also faced a drop of 0.4%, heading towards 5,370, while the three major US indices are anticipated to open lower by approximately 0.8% to 0.9%. Earlier, the Euro-Stoxx50 had just hit its 14th all-time high in 18 sessions, surpassing 5,410 points, reflecting a remarkable 10.5% annual gain—outperforming the S&P 500 and Russell 2000 indices.
Meanwhile, the German DAX, which has already seen over a 10% increase this year, recorded its 16th peak at 22,125 prior to the CPI announcement. The US CPI figure of 0.5%—far above the anticipated 0.3%—confirms persistent inflation in the economy, now exceeding 3%. This has led analysts to predict that the Federal Reserve may postpone any easing of monetary policy until autumn, potentially extending into the end of the year.
The anticipated annual rate for the headline CPI was 2.9%, the same as December’s, but the actual figure of 3% fell short of expectations. The core CPI, expected at 3.1%, came in at 3.3%, highlighting inflationary pressures. Factors such as tariffs imposed on steel and aluminum during the Trump administration are believed to contribute to these rising costs, particularly affecting the automotive sector.
Concerns are also rising about potential 25% tariffs against Mexico and Canada, which provide a significant portion of US food imports, accounting for 44% of the total. This could further impact the CPI, as food makes up 13.5% of this index.
In light of these developments, US Treasury Bond holders are wary, as the 10-year yield jumped by 10.5 points to 4.643%, while the 30-year bond rose by 8.5 points, crossing back over 4.83%. During his Senate Banking Committee hearing, Fed Chairman Jerome Powell acknowledged that while inflation has decreased over the last two years, it remains at elevated levels, stating, “We do not need to rush to adjust our policy,” given the solid economic activity.
Today’s consumer price data has strengthened the dollar by 0.35%, pushing it towards 1.0320/E. Additionally, the Bank of France’s latest monthly business survey indicates slight economic progress for France in Q1, forecasting growth between 0.1% and 0.2% for the first three months of the year.
In the bond market, French OATs tightened by 3.1 points to 3.188%, while German Bunds rose by 4.2 points to 2.472%. In commodities, crude oil prices have dipped following a technical rebound; Brent crude fell by 0.7% to $76.3 per barrel. Gold prices are also down, retreating by 0.9% to $2,875 per ounce after a recent spike above $2,900, as rising US inflation and T-Bond yields weigh on its appeal.
On the corporate front, Carrefour has announced plans to buy out minority shareholders of its Brazilian subsidiary, Grupo Carrefour Brasil, intending to delist it from the São Paulo Stock Exchange through a share merger. Additionally, TotalEnergies has signed a long-term sales agreement with India’s Gujarat State Petroleum Corporation (GSPC) to deliver 400,000 tons of Liquefied Natural Gas (LNG) annually starting in 2026.