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The Paris Stock Exchange posted a decline this Friday after a series of five weeks of progress. In Europe, inflation is being closely watched by analysts, as well as by the Fed in the United States, which plans to raise rates further.
A still gloomy session in the middle of the afternoon. The Paris Bourse is down 0.45% this Friday, failing to keep the momentum of the previous day. It is indeed struggling to digest the latest corporate results of the week and the news of higher than expected French inflation.
The CAC 40 index was down 0.45% to 7,449.59 at around 3:30 pm. The day before, it had advanced by 0.23%. Over the week, the balance sheet is currently negative (-1.40%), breaking a series of five weekly progressions.
According to a study published today by INSEE, inflation rebounded to 5.9% in April in France, after slowing to 5.7% in March. The institute attributes this surge to the prices of energy and services. The price increase was 6.9% according to the harmonized European measure. However, GDP in France grew by 0.2% in the first quarter.
“Activity is holding up well thanks to still dynamic consumption, even if it is slowing down in the first quarter and companies are becoming more cautious in their spending. On the other hand, the persistence of inflation is very real”, observe the analysts at Banque Postale AM.
French household consumption spending continued to decline in March, with a 1.3% drop in purchases of goods over the month, after -0.8% in February.
On the bond market, the French bond rate fell back below 3% (2.97%) after having rebounded significantly on Thursday.
Pressure from the Fed
In the United States, inflation slowed in March to 4.2% from 5.1% the previous month, according to the PCE index published Friday by the Commerce Department. The PCE index is the Fed’s preferred measure of inflation, which it wants to bring down to 2%. To achieve this goal, it has been raising its key rate for the past year. The rate, which was initially in a range of 0 to 0.25%, is now 4.75-5%.
The Fed has warned that it is likely to raise rates again at its next meeting, scheduled for next Tuesday and Wednesday. Overall, the market is expecting another 0.25 percentage point increase.
This increase raises interest rates on loans made by banks to households and businesses. When borrowing costs more, consumption slows down, easing the pressure on prices.
Household income rose by 0.3%, again a slower pace than the previous month, while spending remained stable.
Despite the good performance of the luxury goods sector, such as LVMH, which exceeded 500 billion in market capitalization at the beginning of the week, the Paris Bourse is still worried about the hovering inflation. It remains to be seen how the market will react to future Fed decisions.
Read also >Stock market: LVMH’s capitalization exceeds 500 billion euros
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The Paris Stock Exchange posted a decline this Friday after a series of five weeks of progress. In Europe, inflation is being closely watched by analysts, as well as by the Fed in the United States, which plans to raise rates further.
A still gloomy session in the middle of the afternoon. The Paris Bourse is down 0.45% this Friday, failing to keep the momentum of the previous day. It is indeed struggling to digest the latest corporate results of the week and the news of higher than expected French inflation.
The CAC 40 index was down 0.45% to 7,449.59 at around 3:30 pm. The day before, it had advanced by 0.23%. Over the week, the balance sheet is currently negative (-1.40%), breaking a series of five weekly progressions.
According to a study published today by INSEE, inflation rebounded to 5.9% in April in France, after slowing to 5.7% in March. The institute attributes this surge to the prices of energy and services. The price increase was 6.9% according to the harmonized European measure. However, GDP in France grew by 0.2% in the first quarter.
“Activity is holding up well thanks to still dynamic consumption, even if it is slowing down in the first quarter and companies are becoming more cautious in their spending. On the other hand, the persistence of inflation is very real”, observe the analysts at Banque Postale AM.
French household consumption spending continued to decline in March, with a 1.3% drop in purchases of goods over the month, after -0.8% in February.
On the bond market, the French bond rate fell back below 3% (2.97%) after having rebounded significantly on Thursday.
Pressure from the Fed
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The Paris Stock Exchange posted a decline this Friday after a series of five weeks of progress. In Europe, inflation is being closely watched by analysts, as well as by the Fed in the United States, which plans to raise rates further.
A still gloomy session in the middle of the afternoon. The Paris Bourse is down 0.45% this Friday, failing to keep the momentum of the previous day. It is indeed struggling to digest the latest corporate results of the week and the news of higher than expected French inflation.
The CAC 40 index was down 0.45% to 7,449.59 at around 3:30 pm. The day before, it had advanced by 0.23%. Over the week, the balance sheet is currently negative (-1.40%), breaking a series of five weekly progressions.
According to a study published today by INSEE, inflation rebounded to 5.9% in April in France, after slowing to 5.7% in March. The institute attributes this surge to the prices of energy and services. The price increase was 6.9% according to the harmonized European measure. However, GDP in France grew by 0.2% in the first quarter.
“Activity is holding up well thanks to still dynamic consumption, even if it is slowing down in the first quarter and companies are becoming more cautious in their spending. On the other hand, the persistence of inflation is very real”, observe the analysts at Banque Postale AM.
French household consumption spending continued to decline in March, with a 1.3% drop in purchases of goods over the month, after -0.8% in February.
On the bond market, the French bond rate fell back below 3% (2.97%) after having rebounded significantly on Thursday.
Pressure from the Fed
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