The control room of Euronext, the company that manages the Paris Stock Exchange (AFP / ERIC PIERMONT)
The Paris Stock Exchange ended in a slight decline on Thursday, digesting the publication of higher than expected inflation in the United States, before the publication of the French finance bill for 2025 in the evening.
The flagship CAC 40 index fell 0.24%, or 18.50 points, to 7,541.59 points. On Wednesday, it finished up 0.52%.
Inflation slowed in the United States in September, falling to 2.4% over one year, compared to 2.5% in August, its lowest level in more than three years, according to the CPI index published Thursday by the department. of American Commerce.
But the indicator fell less than expected by the consensus of analysts, who expected a price increase of only 2.3% over one year. Over one month, inflation reached 0.2%, again above expectations.
Although this higher-than-expected inflation “does not change the situation, it could encourage the Fed to be more cautious and to weigh the pros and cons” in its next rate cuts, estimates Christophe Boucher, investment director at ABN AMRO Investment Solutions.
The American Federal Reserve (Fed) entered a phase of lowering its rates in September to revive activity and employment, considering that the fight against inflation must now take second place, after several quarters of restrictive policy in the face of rising prices.
Since then, the September employment report, which came out better than expected on Friday, has illustrated the continued strength of the American economy, calling into question the expected future relief. September’s inflation now increases these doubts.
These two indicators are “a reminder showing that the American economy remains solid, and that we must not move too quickly”, explains Valérie Rizk, economist at Hugau Gestion, to AFP.
In France, the government must unveil its draft budget for 2025 in the evening, a high-risk exercise as the effort planned to reduce the dizzying French public deficit is massive, while the fragmented National Assembly is hostile to it.
The challenge for Paris is to reassure investors, so that the cost of debt does not soar and does not weigh further on its economy.
“I want this effort to be fair and balanced,” Prime Minister Michel Barnier told the press on Thursday on the sidelines of a trip to Vienna, adding that “the attractiveness or credibility of the French signature “had to be preserved”.
In this context, the interest rate on 10-year French State loans stood at 3.02% around 6:00 p.m. (4:00 p.m. GMT). In comparison, the German 10-year rate, which is the benchmark in Europe, stands at 2.25%.
The fact remains that whatever the announcements, “tensions on rates will remain, to the extent that political uncertainty will continue and doubts about France’s ability to reduce its budget deficit will remain”, estimates Valérie Rizk .
Especially since the Fitch rating agency must review its rating of French debt and its outlook for development on Friday, perhaps with a downgrade.
Bon Scor
The securities of European reinsurers are in demand on Thursday benefiting from the weakening of Hurricane Milton on the west coast of Florida. Investors are also counting on the fact that the damage will soon be taken into account when premiums are renewed.
The French Scor gained 2.80% to 20.54 euros.
Euronext CAC40
