The Paris Bourse is set to open on a cautious note on Wednesday morning, with investors taking a breather from the surge of recent weeks as they await monetary policy decisions from the US Federal Reserve.

At around 8:15 a.m., the 'future' contract - April delivery - on the CAC 40 index was down 55 points at 8168.5 points, heralding a session start in the red.

At the end of a two-day meeting, 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 in search of precise clues as to the timing of the next monetary easing.

The authority's 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 further disinflation before they start cutting rates", reminds 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.

While awaiting announcements from the US central bank, this morning investors will take note of the latest inflation figures in the UK and consumer confidence in the eurozone.

On the bond market, the yield on ten-year US Treasuries is easing a little, below 4.30%, ahead of the Fed's decisions. The yield on the German Bund with the same maturity was unchanged at 2.45%.

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

Brent crude oil was down just 0.2% at $87.2 a barrel, holding above its $87 resistance level. U.S. light crude (West Texas Intermediate, WTI) is down 0.4% to $83.1, after approaching $83.5 on Tuesday, its highest level since the end of October.

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