After spending most of the session in positive territory - even setting a new all-time record at 7702 points - the Paris stock market put into reverse in the 2nd half of the afternoon, and saw its gains evaporate. At the final gong, the Paris index was down a moderate 0.27% at 7656 points.

The Fed is in the spotlight this evening, as it is due to present the conclusions of its strategy meeting. Jerome Powell, the Fed's Chairman, will also hold a press conference in the evening, a meeting that is traditionally closely followed by the markets, and all the more so at a time of uncertainty regarding the evolution of central bank monetary policies...

While the prospect of a 'status quo' is hardly in doubt, market participants will be trying to read between the lines and detect any clues as to the pace and timing of rate cuts.

Emmanuel Auboyneau, associate manager at Amplegest, anticipates that "the Federal Reserve is likely to put a clear end to hopes of a rate cut soon (March) and quickly".

In his opinion, "Jerome Powell will try to calm things down, while keeping the door open for future meetings, depending on economic data".

In the meantime, investors took note of the 'ADP' US private sector employment barometer: +107,000 new hires in January, well below economists' expectations (of the order of 150,000 expected according to Jefferies), but also down sharply on the previous month's 158,000 (revised from 164,000 in the initial estimate).

There were also 'figures' this morning in Europe: a further fall (-1.8%) in French industrial producer prices (PPI) in December over one year, after -0.5% in November.
Insee specifies that PPI are virtually stable (+0.1% after +0.2% in November) excluding energy.

Also according to Insee (provisional estimate), consumer prices in France are set to rise by 3.1% year-on-year in January 2024, down significantly from 3.7% in December 2023.

Finally, the German economy contracted in the fourth quarter, according to a new estimate published by the Federal Statistical Office, with GDP down by 0.3% in the last three months of the year compared with the previous quarter in seasonally-adjusted terms, in line with an initial estimate made public on January 15.

There were also stats from China this morning, and the economy remains in contraction territory, with manufacturing activity contracting for the 4th consecutive month in January: the manufacturing PMI stood at 49.2 in January, compared with 49.0 in December.

Chinese indices continued their correction, with Shanghai and Hong-Kong down from -1.4% to -1.5%, and Shenzhen down -5.7%... which has now lost -16% since January 1.

On the bond front, Bunds eased by -8pts to 2.158%, while across the Atlantic, T-Bonds were euphoric, falling by -10.3pts to 3.9520% a few hours ahead of the FED's press release.
The easing of interest rates pushed gold towards $2050 an ounce, i.e. +0.9%.

On the currency front, the euro remained stable against the greenback, at $1.08/euro.

In French company news, Vivendi has returned to its demerger project, and is considering a division into four entities: Canal+, Havas, a company combining publishing and distribution assets (interests in Lagardère and Prisma Media) and an investment company (financial interests in culture, media and entertainment).

Nexans has informed the markets that the French competition authority (Autorité de la Concurrence - AC) carried out raids on three of its sites in France on Tuesday, without specifying which ones. According to the group, these operations are part of an investigation targeting the energy cable distribution sector in the French overseas departments and territories.

TotalEnergies reports that it has signed an agreement with OMV to acquire its 50% stake in SapuraOMV Upstream, a Malaysian gas producer and operator, for a consideration valued at $903 million, subject to the usual adjustments.

Airbus announces the signature of a memorandum of understanding with Avinor, SAS, Swedavia and Vattenfall to study the feasibility of hydrogen infrastructure at airports in Sweden and Norway.

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