ends on the rise, American inflation and Trump in the viewfinder

(awp/afp) – The Paris Stock Exchange ended in the green on Tuesday, with its eyes fixed on the evolution of inflation in the United States and on the future trade policy of American President-elect Donald Trump.

The CAC 40 gained 0.20% to 7,423.67 points, an increase of 15.03 points. The day before, it had experienced a decline of 0.30%.

“Overall, the session” was “very calm,” comments David Kruk, head of trading at La Financière de l’Échiquier, interviewed by AFP. “The publication of the consumer price index (CPI) for the month of December in the United States”, expected on Wednesday, “will be decisive”, he adds.

Investors have feared for several days a rebound in inflation in the world’s largest economy, which would push the Federal Reserve (Fed) to put the brakes on its monetary easing policy.

This pessimistic mood has slowed down the stock markets in recent days, and caused interest rates on government loans on the bond markets to soar.

Investors got a taste of inflation on Tuesday, with the publication of the producer price index in the United States, +3.3% over one year in December, a little less than the 3.5 % anticipated by the consensus of analysts cited by Bloomberg.

This indicator was well received at the start of the afternoon, causing a rise in the main stock indices, before the markets once again gave in to a wait-and-see attitude.

These data “are not directly transposable to inflation figures, which explains the relatively timid market reaction to this positive surprise,” notes Konstantin Oldenburger, analyst for CMC Markets.

European markets were also relieved by information from the Bloomberg agency according to which Donald Trump’s economic team would consider very gradually increasing customs duties month after month, as negotiating leverage.

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During the American presidential campaign, Mr. Trump indicated that he wanted to impose 10 to 20% customs duties on all products entering the United States, and even up to 60% or even 100% on those coming from China.

In this context, values ​​in the automotive sector, which is particularly exposed, benefited from a clear increase.

French equipment manufacturers OPmobility (+7.10% to 11.01 euros), Michelin (+2.72% to 31.74 euros) and Valeo (+5.47% to 9.84 euros) experienced strong momentum. On the manufacturer side, Renault gained 1.83% to 46.66 euros and Stellantis 0.50% to 12.10 euros.

Investors also followed Prime Minister François Bayrou’s general policy statement to the National Assembly. But without enthusiasm: “Everything the Prime Minister spoke about had already been anticipated, and it therefore had no effect on prices,” notes David Kruk.

The interest rates on which borrows over ten years reached 3.47% at the close of the session, compared to 3.45% the day before.

Vivendi loses its legal battle in Italy

Italian justice on Tuesday rejected the appeal of French media giant Vivendi (-0.79% to 2.51 euros) against the sale of Telecom Italia’s fixed network to the American investment fund KKR. Telecom Italia’s largest shareholder with a 23.75% share, Vivendi says it has not given its approval. The Milan court indicated that these requests were declared “inadmissible for lack of interest in taking action”. The group will appeal.

afp/rp

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