The Paris Bourse is expected to trade on a relatively cautious note on Wednesday morning, as the euphoria triggered the previous day by US inflation figures gives way to a more measured mood.

At around 8:15 a.m., the 'future' contract on the CAC 40 index - for delivery at the end of November - was up 18.5 points at 7208 points, still suggesting a modest advance at the opening.

The wave of enthusiasm triggered by yesterday's US inflation figures enabled the Paris market to resume its upward trend, ending the day with a 1.4% gain at 7185 points, not far from its 7200-point resistance level.

But some professionals are pointing out that the slowdown in inflation is mainly due to the sharp drop in prices at the pump, and fear that this favorable sequence will only be short-lived.

'While it is true that the moderation in growth is moving in the right direction, rate hikes remain a possibility in a context where inflation is likely to remain high in the months ahead', warn JPMorgan's strategists.

Muzinich & Co. added: "There is a great deal of uncertainty as to whether the FOMC will be able to bring inflation back to its 2% target.

The persistence of these questions could spoil the party in Europe, where equities are attractively valued in relation to other regional markets and bonds.

The risk, in our view, is that interest rates will remain high for a long period of time", admits Oliver Collin, co-head of European equities at Invesco.

In addition to the risk associated with the direction interest rates will take, the professional points to a number of worrying factors as the year draws to a close, including the possibility of a recession or a hard landing for the economy.

After yesterday's frenzy over inflation figures, markets may be more sober this week, as investors seek a clearer picture of the economic situation.

The markets will be put to the test today by a series of important statistics, starting with the latest inflation figures for France and the UK.

In the USA, retail sales will be released in the early afternoon, providing an indication of consumer spending in the run-up to the festive season.

Up to now, the strong growth of the US economy has been fuelled by household consumption, a vigor that stands out against the current backdrop of tightening credit and slowing employment.

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