The Paris Bourse is likely to move cautiously on Tuesday morning, at the start of a session marked by both the latest US inflation figures and the start of the Fed meeting.

At around 8.15am, the 'future' contract on the CAC 40 index advanced by 20 points to 7577.3, heralding a modest opening advance.

Variations are likely to be limited until the publication of US consumer price figures at 2.30pm, which will test the credibility of the market's preferred disinflation scenario.

Since its low point at the end of October, the CAC 40 index has recovered 11.5% on a near-straight line, thanks to the easing of inflation, which suggests a more accommodating approach on the part of the major central banks.

The markets will therefore be looking for reassurance that the Federal Reserve will not be able to use the argument of persistent inflation to justify its policy of high rates.

The 'core' CPI index, the one most closely monitored by the Fed, is forecast to slow to around 3% in November, a level it has not crossed on the downside since the spring of 2021.

Investors are also likely to adopt a wait-and-see attitude ahead of today's start of the Federal Reserve's two-day monetary policy meeting.

Although no major announcements are expected at the end of the Federal Reserve's monetary policy meeting tomorrow, market participants will be on the lookout for indications of the timing of future rate cuts.

In Germany, the ZEW index could show a slight brightening of economic expectations for the months ahead.

The macroeconomic agenda for the next few days also promises to be very busy, with the European Central Bank (ECB) monetary policy meeting scheduled for Thursday.

The yield on US 10-year government bonds is stabilizing at around 4.24% as we await the monthly US inflation figures and the Fed statement.

The German equivalent is also little changed, at around 2.27%.

There was little movement on the foreign exchange market in the wake of the euro's severe correction, with traders clearly convinced that the ECB will beat the Fed to a rate cut.

At around 1.0780, the single currency is currently staging a timid rebound against the dollar.

On the oil front, U.S. light crude (West Texas Intermediate, WTI) posted a third session of gains, climbing 0.9% to $71.9, after dropping back below $70 last week for the first time since July.

Copyright (c) 2023 CercleFinance.com. All rights reserved.