(CercleFinance.com) – The Paris Stock Exchange should open slightly higher on Friday, still supported by the hopes raised by the Fed’s change of strategy while awaiting a new series of economic indicators.
Around 8:15 a.m., the ‘futures’ contract on the CAC 40 index – December delivery – advanced by seven points to 7583.5 points, suggesting a small progression at the opening.
After establishing a new absolute record at 7653.9 points during the morning, the Parisian market concluded Thursday’s session with an increase of 0.6% to 7575 points.
Buoyed by the Fed’s more accommodating approach, the CAC 40 is currently heading towards a limited weekly gain of 0.2%, but which promises a fifth consecutive week of increase.
The Fed’s more dovish tone, the most significant event of the week, reinforced market sentiment regarding an easing of its monetary policy next year.
The markets believed they detected through the words of Jerome Powell, its president, all the positive messages they wanted to hear, namely resilient growth accompanied by inflation now under control.
On this side of the Atlantic, the ECB’s speech was certainly more cautious, but analysts expect that the European Central Bank will also start reducing its rates in 2024, given the constant downward revision of its growth and inflation forecasts.
The day will be animated, among other things, by the preliminary figures from the PMI surveys on activity in the private sector in Europe, which should still be in the contraction zone.
‘The outlook for demand, European or global, is quite gloomy and the impact of past rate increases remains negative’, recall the economists at Oddo BHF.
“This is not the ideal context to make purchasing managers much more optimistic,” underlines the private bank.
Also to be followed this afternoon, in the United States, the Empire State index of the New York Fed then industrial production.
Post-central bank euphoria continues on the bond market, where the yield on ten-year Treasuries now seems comfortably below the 4% threshold.
The yield on German Bunds of the same maturity, the true benchmark for debt in the euro zone, is plunging towards 2.1%.
On the foreign exchange side, the euro is still showing strength, clinging to the threshold of 1.10, while traders no longer seem so sure that the ECB will be ahead of the Fed in this cycle of rate cuts.
This last session of the week could, however, prove to be volatile due to the ‘four witches’ day, which marks the expiration of many futures contracts and derivatives.
But now that the CAC 40 has managed to overcome its major resistance of 7550 points, the continuation of the upward movement should in all likelihood take it to new highs, beyond 7600 points, if we look at based on technical analyst bets.
Copyright © 2023 CercleFinance.com. All rights reserved.
Did you like this article ? Share it with your friends using the buttons below.
