The CAC40 is trimming its lead slightly, from +1.2% to 0.8% at 7,415 (ditto for the Euro-Stoxx50, which is back at 4,770).
The CAC40 is doing well, since 2 out of 3 Wall Street indices have halved their lead (the Dow Jones is still up +0.9%), while the Nasdaq is down to 0.3%.
However, this is still very timid after Wall Street suffered one of its worst weeks in almost a year, with weekly losses of almost 6% for the Nasdaq.

The day should end well thanks to Tokyo's rebound this morning: the Nikkei lost a quick -3% (after -6% in 3 sessions), but the index recovered strongly and ended the day down just -0.5%.

Inflation figures from China are also reassuring, with the lowest CPI (+0.6% year-on-year) in 4 years and a sequentially negative core index.

Investors are now awaiting the latest US inflation data, which should be reassuring (energy prices continued to fall in August as Chinese purchases slowed), followed by the decision of the ECB, which is expected to cut its key rate by 25 basis points on Thursday.
But the prospect of a marked slowdown in the US economy (confirmed by the latest mixed US employment figures) is worrying, beyond the next rate cuts.

On the figures front, US business inventories rebounded slightly in July (+0.2%) after remaining stable in June, according to data released on Monday by the Commerce Department: the economist consensus was for 0.3%, after remaining perfectly stable the previous month.

The statistics were mainly driven by a 1% rise in automotive inventories, while computer equipment inventories rose by 1.4%.

Business sales rose by 1.1% in July, meaning that at the current rate it will take 1.35 months to clear inventories, compared with 1.38 months in July 2023.

Stakeholders will be hoping for reassurance in the coming days with the US inflation figures, followed by the ECB's speech.

Given that inflation in the eurozone has recently fallen to its lowest level since mid-2021, back within the European Central Bank's target, Mario Centeno, Governor of the Bank of Portugal, recently judged that the decision to cut rates would be 'easy to take'.

Economists therefore expect the ECB to cut its deposit rate by 25 basis points on Thursday, from 3.75% to 3.50%, while revising downwards its outlook for inflation growth.

Its president, Christine Lagarde, is expected to stress at her press conference that the institution remains 'data-dependent', i.e. it will continue to favor an 'as and when' approach at its meetings.

The question investors will now be asking is whether the ECB will cut rates by two or three times this year.

While awaiting the ECB's verdict, investors will be able to study the monthly consumer price figures on Wednesday, with the hope that these will show lower-than-expected underlying inflation.

Consensus forecasts point to CPI inflation of 0.2% month-on-month in August, bringing the year-on-year rise to 2.6%.

The core CPI index, the one most closely followed by the Fed, is expected to hold steady at 3.2% year-on-year, as in July.

Traders are hoping that this data will enable them to settle the debate between the prospect of a 25 or 50 basis point rate cut by the Fed next week.

The week following the US jobs report is generally quiet on the markets, but these hesitations promise some further volatility until the Fed's announcements, scheduled for Wednesday September 18.

The mixed employment figures (published last Friday, editor's note) suggest, however, that the markets want more rate cuts than the Fed is in a position to offer them", stresses Michael Brown, strategist at Pepperstone.
US rates, which had eased sharply last week, are easing a little this Monday, with +1Pt on the T-Bond 2034 at 3.712%.
A consolidation session in Europe, with the Bund unchanged at 2.1700% and our OATs at 2.8800%.

Another element likely to influence the trend is the first televised debate between Kamala Harris and Donald Trump in the run-up to the November 5 presidential election in the United States.

While the gap in voting intentions has recently widened in favor of the Democratic candidate (according to the Democratic media, which is in the majority in the USA, the few 'conservative' media outlets are producing the opposite figures), it is likely that many voters will rely on this debate to make their choice.

Caution: the 2016 scenario with Clinton's confident campaign could happen again", warn the analysts at DeftHedge, a specialist in decision support for foreign exchange and commodities risk.


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