The Paris Stock Exchange is up for the sixth session in a row as the publication of consumer price figures for last month in the United States approaches. The market is betting that the peak of inflation has passed, which would also be good news for the Federal Reserve in its fight against soaring prices. This expectation has relegated to the background the stronger than expected deterioration in economic sentiment in Germany, the largest economy in the euro zone, where the ZEW index sank to -61.9 points in September, against -59.5 expected and -55.3 in August.
Mid-session, the Bedroom 40 takes 0.42% to 6,359.88 points and, if the trend is confirmed at the close, it will be the longest bullish series since November 2021. The volume of business is however limited with 650 million euros traded . The contracts future on American indices gained between 0.3% and 0.4%.
The consensus formed by Bloomberg is counting on a contraction of 0.1% over one month in consumer prices as a whole in the United States and on a drop to 8.1% over one year, after 8.5% in July and a 40-year high of 9.1% in June. Excluding volatile elements such as food and energy, prices should nevertheless have increased by 0.3% over one month, as in July, and by 6.1% over one year after +5.9%.
What about the attitude of the Fed?
The statistic is, along with the producer price index (expected Wednesday), one of the last on inflation ahead of the Federal Reserve’s monetary policy committee meeting on September 20-21. With the Fed entering a blackout ahead of next week’s FOMC, some analysts are hoping that a drop in line with expectations, or even bigger than expected, will prompt the central bank to opt for a 50 basis point hike in its interest rates next week, rather than 3 quarters of a percentage point.
” The fact is that two consecutive reports reflecting a sharp deceleration [de l’inflation], combined with ideal employment figures would be a truly encouraging sign that could lead to a broader rebound in the markets, notes Craig Erlam, market analyst at Oanda. However, he warns that that shouldn’t be enough to tip the Fed in favor of a limited 50bp hike next week, but it could have the effect of slowing the pace of rate hikes thereafter. »
Michael Hewson, chief market analyst at CMC Markets, judges for his part ” moderate action by the Fed in this period could jeopardize the tightening of financial conditions seen since Jackson Hole “. Moreover, if the central bank wants to hold the line of a Fed funds rate of 3.5% to 4%, it should be firm next week and opt for another 75 basis point rate hike, regardless of the CPI figures today , and PPI tomorrow “, he argues.
Euroapi boosted by Deutsche Bank
Biggest rise in SRD, Euroapi rose 4.1%, supported by a note from Deutsche Bank, which raised its price target from 20 to 22 euros while maintaining its recommendation to “buy”.
Eurofins Scientific goes up 1%. Societe Generale raised its recommendation on the title of the bio-analysis laboratory from “sell” to “keep” and raised its price target from 72.20 to 73.30 euros.
The same intermediary increased its target price from 127.20 to 139 euros on Ipsen, maintaining its opinion at “buy”. The title of the pharmaceutical group reaps 2.6%.