The U.S. inflation report released Tuesday could play a major role in determining the timing and extent of the Federal Reserve’s decision to cut interest rates.
European stocks edged higher Monday morning as investors eagerly awaited the January U.S. inflation report due out Tuesday. The report is expected to strongly influence the US Federal Reserve’s decision to ease monetary policy in March or wait until May.
However, despite monetary easing, inflation in some commodities such as cocoa and chocolate may still take some time to come down, due to unfavorable weather conditions in major cocoa producing countries like Ghana and the Costa Rica. ‘Ivory.
Prices of other products from supermarkets and retail chains may also be slow to fall, due to the ongoing Red Sea crisis which continues to cause significant delays in shipments. This results in both unavailability of some products and significant price increases for others.
The CAC 40 rose 0.49% to 7,685.5 on Monday morning, while the Stoxx 600 index edged up 0.40% to 486.7. In contrast, the FTSE 100 fell 0.21% to 7,556.7.
Asian markets were relatively calm, due to the celebration of the Lunar New Year by several countries such as Singapore, China and Japan.
Luxury and public service values are progressing, software is getting bored
L’Oréal was one of the best gainers in the CAC 40 index on Monday morning, climbing 3.52% to 433.6 euros. It’s a robust recovery after the company’s stock price recently fell about 8% due to sales struggles in Asia.
Utility company Engie also performed well on Monday, gaining 1.40% to 14.3 euros, after the company revealed it planned to sell its stake in Senoko Energy, a state-owned utility company. electricity based in Singapore.
At the bottom of the scale, software giant Dassault Systèmes fell 1.48% to 43.2 euros. The company recently partnered with BMW to work on the latter’s engineering platform.
Aeronautical equipment manufacturer Safran is also down, falling 0.74% to 175.0 euros. The company recently partnered with Turbotech to test its first hydrogen turboprop for light aircraft.
What to watch in the coming week
On Tuesday, in addition to US inflation, investors are also awaiting the UK unemployment rate for December and the French unemployment rate for the fourth quarter of 2023, as well as Turkish retail sales for December. The German Economic Sentiment Index for February is also expected on the same day.
On Wednesday we will publish the UK inflation report for January, as well as the Eurozone gross domestic product (GDP) report for the fourth quarter of last year. UK GDP figures for the fourth quarter of 2023 will be released on Thursday, as will US retail sales.
A number of speeches from members of the US Federal Reserve throughout the week, as well as a speech from European Central Bank (ECB) President Christine Lagarde, are all expected this week.