The Paris Bourse confirmed its downward trend at the end of the session, as it awaited ECB announcements and US inflation figures, which could influence the Fed's next decisions. At the end of the session, the CAC40 index was down 0.86% at 8049 points.

With no major indicators on today's agenda, the mood is likely to be one of pause, with investors keeping a close eye on the ECB's decisions, expected on Thursday.

The only figure expected is France's trade balance for February 2024. It improved significantly, according to CVS-CJO data from the French customs administration, with the deficit down to 5.24 billion euros from 7.21 billion the previous month.

Economists expect the European Central Bank to keep its key rates unchanged, and to insist once again on its 'data-dependent' approach.

The Frankfurt-based institute seems reluctant to cut rates ahead of the US Federal Reserve, which seems to be giving increasing thought to reducing the cost of money this year.

Despite the hawkish tone adopted by several Fed members of late, and better-than-expected economic indicators, equity market momentum remains favorable.

The CAC 40 index ended yesterday with a 0.7% gain to 8119 points, still very close to its recent all-time high of 8253.6 points.

Investors seem to consider that the extent of the rate cut in the US this year will have little influence as long as US growth outperforms the rest of the world and corporate earnings are up to scratch", points out Christopher Dembik, Investment Strategy Advisor at Pictet AM.

However, more and more observers believe that rates may not move until the autumn.

In the US, traders now rate the probability of a rate cut in June at just 51%, compared with 61% a week ago, according to the CME Group's FedWatch barometer.

In addition to the ECB, one of the week's highlights is likely to be tomorrow's release of the latest US inflation figures, which investors will be scrutinizing for clues as to the timing of future interest rate cuts.

"Barring an accident (...), the underlying trend is bullish", assures Christopher Dembik.

Another reason for caution is that the sharp rise in indices since the start of the year is beginning to rekindle doubts among some analysts about equity valuation levels.

'Equity indices are at high levels (in terms of price and performance), in uncharted territory', say the teams at Apicil AM.

The positioning of investors (based on ETF flows and large futures players) is clearly tense", adds the management company.

"Until now, the fear of not participating in the bullish rally has directed capital towards indices in the broad sense. We now need to be more selective in terms of which sectors to play," warns Apicil.

Against this delicate backdrop, market participants are currently favoring gold, seen as a safe-haven asset in the face of uncertainties surrounding interest-rate trends in both the USA and Europe.

Although it eased yesterday, the CBOE's VIX volatility index hit annual highs last week, showing that traders are becoming less and less confident that the recent bullish rally will continue.

On the stock front, Berenberg announced on Tuesday that it had raised its price target for Wendel from €109 to €122, while continuing to recommend the stock as a buy due to the "perfect" execution of the strategy implemented by the investment firm.

On Tuesday, Barclays upgraded its recommendation on Renault to 'overweight' from 'in-line weighting', and raised its price target from €36 to €60, believing that it was not too late to take advantage of the rebound in the share price.

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