The Paris Stock Exchange is set to open positively, with the CAC 40 futures rising as investors await U.S. retail sales data. Following a 0.7% increase in the Paris index, optimism continues from favorable U.S. inflation news. Key economic indicators, including Germany’s inflation and ECB minutes, are also on the radar. U.S. banks report earnings today, while bond yields have decreased, and crude oil prices are climbing due to geopolitical factors and a drop in U.S. stockpiles.
Positive Outlook for the Paris Stock Exchange
The Paris Stock Exchange is poised to kick off Thursday on a high note as investors eagerly anticipate retail sales data from the United States. Following encouraging news about American inflation, optimism is sweeping through the markets.
As of 8:15 AM, the CAC 40 futures contract for January has surged by 43 points to reach 7521 points, indicating a continuation of the upward trend that began the previous day.
Market Reactions and Anticipated Data
On Wednesday, the Paris index closed with a 0.7% increase, finishing at 7474 points, buoyed by global market reactions to lower-than-expected core inflation in the U.S. This positive sentiment extended to Wall Street, where major indices saw significant gains, with the Dow Jones rising by 1.7% and the Nasdaq by 2.5%.
Investors are now looking forward to the U.S. retail sales data set to be released at 2:30 PM, which is expected to show a 0.5% month-on-month increase for December, reflecting consumer demand during the crucial holiday shopping season. Additional economic indicators such as import prices, unemployment claims, and the Philadelphia Fed index are also anticipated.
In Europe, attention will turn to Germany’s latest inflation figures, the eurozone’s trade balance, and industrial production metrics from the UK. A key highlight will be the release of the European Central Bank (ECB) governing council minutes at 1:30 PM, detailing their recent fourth rate cut within six months, amid concerns about eurozone growth risks expressed by President Christine Lagarde.
On the earnings front, major U.S. banks, including Bank of America and Morgan Stanley, will report their quarterly results today, drawing significant market attention.
Despite reassuring inflation data, investors may still adopt a cautious approach as they await the inauguration of Donald Trump this coming Monday, with some analysts suggesting that the true market momentum for 2025 may only commence post-inauguration.
In the bond market, yields have eased following the positive inflation news, with the yield on ten-year Treasuries dropping to 4.65%, a notable decline from over 4.80%. This shift is also positively impacting European markets, with ten-year German Bund yields returning to 2.56% and French OATs to 3.35%, narrowing the spread between the two countries’ government bonds.
Meanwhile, crude oil prices are on the rise, with American light crude surpassing $80 for the first time since last summer. This increase is fueled by U.S. sanctions on the Russian energy sector and recent announcements of a ceasefire in Gaza, along with a significant decrease in U.S. oil stockpiles. Currently, Brent crude is up 0.2% at $82.2, while Texas WTI has gained over 0.2% to reach $80.2.