At around 08:00 GMT, the CAC 40 lost 14.09 points to 7473.28 points. The previous day, the index had ended up 0.51%.
After a cycle of eleven increases, the Fed is due to begin easing its monetary policy on Wednesday, while its rates have been at their highest in two decades since July 2023.
“This meeting could be the most important since August 2007” and the start of the subprime crisis, summarises Antoine Andreani, analyst at XTB.
Investors are struggling to decide between expecting a moderate cut of 0.25 percentage points and a more significant cut of half a point, as the extent of the slowdown in the world’s largest economy is being questioned.
A scenario of a 50 basis point drop had won the majority of analysts’ consensus in recent days, supporting the stock markets, against a backdrop of fears of recession in the United States and inflation at its lowest since 2021.
But two better-than-announced economic indicators ultimately moderated this observation on Tuesday, confusing the forecasts.
U.S. retail sales rose 0.1 percent month-on-month in August, missing expectations for a 0.2 percent contraction, while industrial production rose 0.8 percent month-on-month, its fastest pace since February and significantly above the 0.2 percent expected.
Awaiting Jerome Powell’s speech
“Beyond the Fed’s decision on its rates today, it is above all the signal effect of this decision which will be important for the markets,” estimates Xavier Chapart, analyst for LBPAM.
As such, the speech that Jerome Powell will deliver at the end of the meeting will be particularly scrutinized by investors.
During the session, European investors will also be interested in the publication of the second estimate of inflation for August in the euro zone at 9:00 GMT.
In France, the markets are keeping an eye on the budgetary situation, which the new Prime Minister Michel Barnier, in the midst of forming his government, described as “very serious” on Wednesday.
The French 10-year borrowing rate stood at 2.88% around 0800 GMT, compared with 2.85% the previous day. The German yield was at 2.15%, compared with 2.14% on Tuesday.
Another highlight this week: the Bank of England (BoE) meeting on Thursday, while UK inflation remained stable year-on-year in August at 2.2%, according to data released on Wednesday.
The Bank of Japan (BoJ) will follow on Friday, amid growing divergences in its monetary policy with its counterparts. Analysts expect the BoJ to keep the interest rate unchanged, after raising it in late July.
Carmat is breathless
The French biomedical specialist Carmat, artificial heart manufacturer, lost nearly 13% around 8:15 GMT, after announcing on Wednesday a capital increase of 10.3 million euros to “finance its activities until the end of 2024”, with an issue price of new shares of 1.60 per share.
Eutelsat down
European satellite operator Eutelsat (-1.49% to 3.96 euros) announced on Wednesday a new partnership with Japanese Mitsubishi Heavy Industries (MHI) to launch future satellites with a Japanese H3 rocket. “The agreement provides for the provision by MHI of an H3 launcher capable of carrying out various launch missions from 2027. This agreement is the first of its kind between Eutelsat and MHI,” the European group explained in a press release.
