The Paris Bourse is set to open lower on Thursday morning, with the market feeling the pinch from the Federal Reserve's stated intention not to rush into rate cuts.

At around 8.15am, the future contract on the CAC 40 index - February delivery - dropped 59.5 points to 7,613.5, suggesting that the session could start in the red.

Unsurprisingly, the Fed kept rates unchanged last night, but comments by Chairman Jerome Powell dashed hopes of monetary easing as early as March.

"The Fed confirms its pivot, but doesn't want to make the mistake of cutting rates too quickly", explains Bastien Drut, Head of Strategy and Economic Research at CPR AM.

The reaction of the futures markets has been clear-cut, with only 35% of traders now anticipating a rate cut in March, according to FedWatch, compared with 73% a month ago.

"The market will have to understand that rates will come down less and later than expected", warns Christopher Dembik , Investment Strategy Advisor at Pictet AM.

This is likely to generate, at the very least, volatility", he stresses.

The VIX volatility index surged yesterday afternoon in New York to 14.3, its highest level since mid-January, i.e. during the correction at the start of the year.

The Fed's lack of support plunged Wall Street on Wednesday, with the S&P 500 index dropping 1.6% last night to post its worst performance since last September.

While the tech giants' releases have so far been poorly received, reinforcing investors' pessimism, the announcements from Apple, Amazon and Meta will be of particular importance this evening.

On the economic front, inflation in the eurozone will be published at 11:00 a.m., and is expected to fall in January according to consensus, thanks to the sharp drop in gas and electricity prices.

Following last week's disappointing composite PMI figures in Europe, investors will take note of the PMIs measuring activity in the manufacturing sector at the start of the session.

While the decline in the inflation rate, which was very marked between May and November, came to a halt last month, the Bank of England is expected to extend its 'status quo' at lunchtime.

Despite the postponement of the prospect of rate cuts in the United States, the dollar continues to show strength against the euro, which is back towards 1.0785 against the greenback.

Optimism remains, however, on the fixed-income markets, where the yield on 10-year US Treasuries is down to 3.96%, its lowest level since the start of the year.

Oil prices, which are little affected by Wall Street's decline, are also well positioned, with the March contract for US light crude (West Texas Intermediate, WTI) up 0.1% at $75.9.

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