The Paris Bourse (-0.5 to -0.6%) has been drifting sideways between 8,150 and 8,160 since 11:00 this morning, and seems to be trapped in a veritable algorithmic straitjacket, just like Wall Street since 14:30.

The CAC40 is undergoing - on its own - a consolidation that began in electronic trading on Tuesday evening, as soon as the (poor) results of Kering/Gucci were known.
A decline of -0.8% was emerging this morning, which has now eased, except for Kering, which has plunged by -13/-14% (dragging LVMH -2% in its wake, but not Hermès or Essilor, which remain stable).
The impact of Kering and LVMH on the Euro-Stoxx50 is undeniable, as the index loses 0.3% (back to 4,995, the 5,000 mark can still be saved), while Frankfurt gains +0.1% to 18,000 after setting a new intraday record at 18.044Pts.

A wait-and-see attitude prevails on Wall Street, which has remained virtually unchanged since the opening (with the 3 main US indices trading less than 0.1% apart in absolute terms), as we await the US Federal Reserve's monetary policy decisions, which will be announced at 7pm.

The Fed will issue a statement this evening, which will be closely studied by market participants in an attempt to get an idea of when the central bank will decide to cut rates.

Market operators will be closely scrutinizing the Washington-based institution's announcements for precise clues as to the timing of the next round of monetary easing.

Fed Chairman Jerome Powell will also be speaking at his traditional press conference.

Traders currently see a 60% probability that the Fed will cut rates in June, according to the CME Group's FedWatch barometer, but their optimism could be shaken by the outcome of the meeting.

Investors will be paying particular attention to new rate forecasts, the so-called "dot plots", with the risk that expectations of the next rate cut will once again be postponed.

The median scenario should still point to three rate cuts in 2024, but only just," warn Bank of America strategists.

Many analysts believe that the Fed is being forced into inaction by the resilience of the US economy, accompanied by a revival in inflation.

Both the Fed and the ECB would like to see disinflation continue before they start cutting rates", recalls Amaury d'Orsay, head of bond markets at Amundi.

"Given the recent trend in underlying US services inflation, it makes sense for them to be patient", continues the manager.

Traditionally, investors prefer not to take strong buy or sell positions ahead of Fed decisions, so as not to get caught up in the wrong direction.

Christine Lagarde, for her part, said on Wednesday that the main risk now would be to start cutting rates too late.

On the bond market, the yield on US ten-year Treasuries eased symbolically by -0.5Pt to 4.279%, ahead of the Fed's decisions.
Yields on German Bunds of the same maturity and on our OATs eased by -1.5Pt to 2.434% and 2.8730% respectively.

Crude oil prices fell back slightly from their annual highs reached the previous day, pending the release of US crude inventories by the US Energy Information Agency (EIA), scheduled for the afternoon.

With a -1.4% drop to $86, the price of a barrel of Brent seems to be reacting downwards after testing resistance at $87. U.S. light crude (West Texas Intermediate, WTI) is down 1.3% at around $82.3, after approaching $83.5 on Tuesday, its highest level since the end of October.

On the value side, Kering (-13% at 370E) warned last night that its sales would fall sharply in the first quarter, weighed down by the underperformance of its Gucci brand, a warning that sent its share price down nearly 13% and dragged the entire luxury goods sector in its wake.

Citing a "difficult" economic climate, the group indicated that first-quarter sales were likely to be down by around 10% on a like-for-like basis compared with last year.


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