(CercleFinance.com) – Finally some real good news this Wednesday.
The Paris Stock Exchange jumped +1% and the CAC repositioned itself above 7,500 points, following the publication of a US ‘CPI’ in line with expectations, and even slightly better than expected in ‘core’ data (excluding elements volatile prices).
The 3 main American indices have jumped from +1.5% (Dow Jones) to +2.3% (Nasdaq) since 2:30 p.m. and rates suddenly relax from -12 to -14 basis points.
On a sectoral level, banks soared by +2.8%, semiconductors and consumer stocks by +2.3%, ‘networks’ by +1.7%.
The ’10 year US’ fell from 4.79% to 4.646%, the ’30 year’ from 4.985% to 4.865%, the ‘2 year’ from 4.365% to 4.2260%.
Investors are once again favoring a scenario involving two rate cuts from the FED, in June (65%) and December (nearly 50%).
This sudden decline in US rates boosted European debts: Bunds erased -10.5Pts to 2.516%, our OATs -13.7Pts to 3.337%, Italian BTPs -16.5Pts to 3.6760%.
The OAT/Bund spread contracts to +82 points (this is due to the feeling that the Bayrou government will escape censure tomorrow), this adds to the pleasant surprise of the US ‘CPI’.
According to the Department of Labor, the US Consumer Price Index increased 2.9% in December 2024 compared to the same month of 2023 (as expected), an annual rate in line with expectations and up 0 .2 points compared to November.
Excluding energy (-0.5%) and food products (+2.5%), two traditionally volatile categories, the underlying annual inflation rate stood at 3.2% last month, a level slightly below of the consensus of economists.
Sequentially, that is to say between the months of November and December 2024, consumer prices in the United States increased by 0.4% in raw data and by 0.2% excluding energy and food products
Economic activity declined in New York state in January, according to businesses responding to the Empire State Manufacturing Survey. The general economic conditions index fell by fifteen points to -12.6.
New orders fell slightly, while shipments remained virtually unchanged.
Furthermore, labor market indicators showed stable employment levels, but a decrease in the average length of the working week. Increases in input prices and selling prices have accelerated.
Businesses were more optimistic that conditions would improve in the coming months.
Investors were informed this morning of data concerning inflation in France. Over one year, consumer prices in France increased by 1.3% in December 2024, a stable annual rate compared to that of November, in accordance with the provisional estimate published last week by INSEE.
The markets are anticipating a hectic second half of the week between a wave of results publications and an intense macroeconomic agenda.
It’s off to a good start for US banks with good 4th quarter results: increases of +3.8 to +6.5% are observed Morgan Stanley and Blackrock (+3.7%), (+4%), Goldman Sachs , Citi and Wells Fargo (+5.2%)… but JPMorgan remains a little behind (+1%).
It remains to assess the strength of consumption and the country’s economic prospects in light of Donald Trump’s first political decisions.
Other elements to watch, the barrel of Brent rebounds by +1% towards $80.90 (if it passes $81, this will affect inflation forecasts) and the WTI surges by almost +1.2% to 77 $.85 (close to resistance at $78).
On the foreign exchange front, the Dollar fell by -0.1% (towards 1.03150 against the Euro, its too rapid rise could handicap American exports).
In French company news, Esker claims the best year in its history with a turnover for the entire 2024 financial year of 205.3 million euros, up 15% at constant exchange rate as in published data.
Under the framework agreement signed with TenneT in May 2023, and following the first contracts announced in March 2024 for the BalWin3 and LanWin4 links, Nexans indicates that it has won the contract for the LanWin2 project, worth one billion euros.
Voltalia announces the start of construction of the Los Venados solar project, with a total capacity of 19.7 megawatts, in the Tolima region. The group’s first project in Colombia, its commissioning is planned for the first quarter of 2026.
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