The CAC40 has clearly accelerated its advance since the publication of the 'CPI' at 1:30 p.m.: the index has risen from +0.5% to +1.7% and has regained the 7,100 mark (at 7,130).
The Euro-Stoxx50 is not to be outdone with +1.8% at 4,170, while Wall Street has just reopened up +1% (Dow Jones) to +1.4% (S&P500)... and the Nasdaq outperforms with +1.8% to 11,400.

The first pretext to justify a rebound is the right one: the 'glass half-full' reading of the inflation figures: price inflation stands at +0.4% to 6% annualized, but is slowing due to a 'base effect' compared with February 2022, i.e. a 'low' since September 2021.
The Labor Department reports that core inflation (excluding energy and food) accelerated slightly last month to 0.5% sequentially, compared with consensus expectations of 0.4%.
This rise in prices was fuelled by the costs of (housing) construction, leisure, home furnishings and airfares.
Conversely, core CPI benefited from a rebound in prices for used cars and healthcare services, but came in at 5.5%, in line with analysts' forecasts, who noted that this was the lowest level since December 2021...again in the context of a "base effect" (for consumers, their purchasing power is still seriously challenged).

Closer to home, Spain's 'HICP' inflation (calculated to European standards) accelerated for the second month running in February, from 5.9% to 6.00%, the National Statistics Institute (INE) announced on Thursday.

Month-on-month, the price index rose by 0.9%, driven mainly by housing prices (+3%) and food and beverages (+2%).
Calculated according to national standards, Spanish inflation was also up by 0.9% month-on-month, and by 6% year-on-year, according to the INE.
By way of comparison, annualized inflation in the eurozone stood at 8.5% in February.
Inflation has not yet said its last word, but the markets seem to think that a major tipping point has just occurred, and that the Fed has no choice but to limit, or even postpone, its interest rate hike program in order to avoid any "systemic" risk.

According to the CME's FedWatch barometer, market participants rate the probability of the Fed maintaining the status quo next week at 47%, with the probability of a 25bp hike rated at 53% (and expectations of a +50bp hike down to zero).

Strategists agree, however, that markets are unlikely to calm down anytime soon.

The CBOE Volatility Index, often dubbed the 'fear barometer', which measures expectations of fluctuations in the S&P 500, rose again yesterday to reach new highs since last autumn, before falling back by -7% to 23.60.

The upsurge in volatility that accompanied the SVB affair could therefore be a harbinger of further tremors to come.

In its latest annual report, Credit Suisse acknowledged that it had identified "significant weaknesses" in the internal control of its financial statements for the 2021 and 2022 financial years.

The bond markets, which had recorded an all-time high the previous day (and the lowest short-term yields seen in 401 years), saw yields ease a little, with +10pts on our OATs to 2.922%, +14pts on Bunds to 2.423%, and +10pts on Spanish 'Bonos' (to 3.48%), which did not slip, despite Spain's higher-than-expected inflation rate.
Note the +16.5Pts rise in the yield on US T-Bonds to 3.679%, which seems to belie Wall Street's somewhat 'hedonistic' reading of CPI.

The Dollar recovers +0.3% to 1.0700/E

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