The Paris Bourse is now close to equilibrium following announcements by the European Central Bank (ECB). The CAC40 index remains close to 8025 points, down 0.2%.

At the close of its monetary policy meeting in Frankfurt, the Governing Council of the European Central Bank (ECB) decided to leave its three key interest rates unchanged, at 4.50%, 4.75% and 4.00% respectively.

If its updated assessment of the situation 'were to further strengthen its confidence in the sustainable convergence of inflation towards the target', the Board believes that 'it would be appropriate to reduce the current restrictiveness of monetary policy'.

While the recent decline in inflation has apparently reinforced the assumption of an ECB rate cut in June, the central bank has once again reiterated its 'data-dependent' approach.

Following yesterday's higher-than-expected inflation figures in the US, the growing uncertainty surrounding future Fed rate cuts could also influence its language.

According to the CME's FedWatch barometer, traders now assess the probability of a 25-point rate cut in June at just 17.9%, compared with 59.1% last week.

For many analysts, it remains unlikely that the ECB will decide to cut rates before the US Federal Reserve starts its own monetary easing cycle.

'The Fed gives direction and the ECB follows. This is a widely held view", recalls Bruno Cavalier, economist at Oddo BHF.

In statistical terms, the Labor Department reports that US producer prices rose by 0.2% in March compared with the previous month, both gross and excluding food, energy and business services.

Over the last twelve months, the rise was 2.1% gross and 2.8% excluding food, energy and commercial services last month, compared with annual rates of 1.6% and 2.7% respectively in February.

The leader-follower pattern is one we've seen in several past monetary cycles, but not in all," he moderates.

Against this wait-and-see backdrop, the euro continues to weaken, towards 1.0740, but is still moving in the corridor between 1.05 and 1.11 that has characterized parity since the start of 2023.

Mabrouk Chetouane, Head of International Market Strategy at Natixis Investment Managers, comments: "We expect the US dollar to gradually appreciate against the euro over the next three to six months, for both cyclical and structural reasons, and to cross the 1.05 threshold.

On the bond market, government bond yields are stabilizing ahead of the ECB meeting, at 2.43% for the German 10-year.

On the oil front, prices remain close to peaks since the end of November, due to supply disruptions and signs of firming demand.

U.S. light crude (WTI) remains close to the $85 mark, despite yesterday's announcement of a further increase in U.S. crude inventories last week.

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