The Paris Stock Exchange is set for a positive opening as the CAC 40 index futures rise amid cautious investor sentiment ahead of U.S. inflation data. Despite a slight decline on Friday, the index maintained a weekly gain and has surged nearly 9% this year. Key economic indicators, including personal consumption expenditures, are anticipated to influence market trends, while trade developments and potential tariffs from the U.S. also capture investor attention.
Positive Outlook for the Paris Stock Exchange
The Paris Stock Exchange is poised for a promising start on Monday morning, with expectations of an upward trend. However, market movements may remain cautious as investors await a fresh batch of economic indicators, particularly the much-anticipated U.S. inflation data scheduled for release on Friday.
As of 8:15 AM, the ‘future’ contract for the CAC 40 index, now set for April expiration, has risen by 57 points, reaching 8,110 points. This suggests a strong opening for the week ahead.
Market Trends and Economic Indicators
Despite closing Friday’s session down 0.6% at 8,042 points, the benchmark index managed to maintain a weekly gain of 0.2%, keeping it near record highs. Since the start of the year, the Paris market has surged nearly 9%, outperforming Wall Street, which saw a recovery last week.
In the previous week, the Dow Jones climbed by 1.2%, the S&P 500 increased by 0.5%, and the Nasdaq rose by 0.2%. This marked the end of a four-week streak of losses for U.S. stock markets, which had previously pushed the S&P 500 into correction territory.
The CBOE VIX index, a measure of market volatility, slipped below the critical 20-point mark on Friday after nearing 30 points the week before. Analysts are wary of the S&P’s failure to consistently breach its 200-day moving average, a key technical indicator, following several unsuccessful attempts.
Investors are eagerly anticipating the upcoming U.S. economic data, hoping it will sustain the rebound initiated last week. The focus will be particularly on the personal consumption expenditures (PCE) index, which will shed light on the inflation trajectory, potentially influencing the Federal Reserve’s decision on interest rates.
Comments from the Fed chairman last week have been positively received, suggesting that inflation driven by new tariffs may be a ‘temporary’ issue. Amid concerns regarding U.S. economic growth, market participants are optimistic that this week’s indicators will reflect a robust consumption sector.
Claudia Panseri, head of investments at UBS WM France, remarked on Friday that fears of a U.S. recession are overstated. While economic activity is projected to decelerate in 2025, she does not foresee significant declines in the labor market or household spending.
Household spending data to be released alongside the PCE is expected to show a 0.7% increase for February, bolstered by a 0.4% rise in incomes. Conversely, strong indicators could unsettle markets, raising concerns that the Federal Reserve may resist rate cuts anticipated after its June meeting.
While U.S. economic indicators will provide crucial insights into the nation’s economic health, investors will also keep a close watch on developments in Europe, searching for signs of improvement on the continent.
With PMIs expected in the morning, market participants are keen to identify any indications that the manufacturing sector has hit a low point and is ready for a gradual recovery.
Investor sentiment will also be directed towards trade developments, particularly following Donald Trump’s announcement of impending ‘reciprocal’ tariffs set to take effect on April 2. This action is framed as a response to trade barriers imposed by other countries, including key U.S. allies.
Experts predict that this topic will dominate headlines in the coming days. However, futures contracts for U.S. stocks have risen this morning, fueled by reports suggesting that these tariffs could be more targeted than initially feared.