The Paris Stock Exchange was trading in balance mid-session on Tuesday, against a backdrop of investor caution ahead of a meeting of the American Federal Reserve (Fed) and in the context of political and economic instability in France.
At 10:50 a.m. Paris time, the CAC 40 index gained 0.09% to 7,321.94 points. On Monday, the flagship index fell by 0.71% to settle at 7,357.08 points.
The markets have their eyes glued to the Fed’s monetary policy meeting which begins today and ends on Wednesday.
At the end of this meeting, “Federal Reserve set to announce additional 0.25 percentage point cut” according to Ipek Ozkardeskaya, of Swissquote Bank, aligned with the consensus of analysts.
This new drop would add to that of 0.75 points made since September.
Comments from Fed Chairman Jerome Powell are particularly expected before Donald Trump comes to power in January, which brings uncertainty for the economy.
However, the United States is recording more growth than the euro zone, dragged down by its two largest economies, Germany and France.
“The French political context is still gloomy and is starting to have worrying effects on economic activity”comments Christopher Dembik, investment strategy advisor at Pictet AM.
The Banque de France lowered its growth forecast for 2025 on Monday and its governor warned against “political discord” in the country. It now forecasts GDP growth of 0.9% in 2025, compared to 1.2% previously.
Just after the appointment of François Bayrou as Prime Minister on Friday, the rating agency Moody’s lowered the French sovereign rating from Aa2 to Aa3 with a stable outlook.
Pending the adoption of a 2025 budget, the Assembly voted on Monday to “special law” authorizing the executive to collect taxes and borrow to finance the State and Social Security. So, “we could still have underperformance of the Paris Stock Exchange for a while compared to other European indices”anticipates M. Dembik.
In this context, the yield on 10-year French government bonds was 3.03% at 10:00 a.m., compared to 3.04% the day before at the close.
TotalEnergies lets go
The oil and gas group TotalEnergies (-0.98% at 10:40 a.m.) announced Monday the sale to EPUKI, the British subsidiary of the Czech energy company EPH, of half of its shares in West Burton Energy, acquired 100% last June.