The Paris Bourse is expected to open in the red on Friday, with caution prevailing ahead of a busy session marked by both European inflation figures and the US employment report.

At around 8.15am, the 'future' contract on the CAC 40 index - January delivery - dropped 38 points to 7424.5, suggesting that the session could start in negative territory.

This final session of the week looks set to be the most important since the start of the year, with a particularly busy statistical calendar.

For the first week of the year, which was cut short due to the New Year, the CAC 40 is currently posting a weekly decline of around 1.2%.

The trend is weighed down by profit-taking following the spectacular gains at the end of 2023, which had enabled the major indices, led by the CAC, to reach new record highs.

Investors also seem to be increasingly questioning the Fed's monetary easing timetable, which has triggered a rebound in US bond yields.

Analysts also point to the emergence of a sector rotation in favor of defensive stocks, which did not perform well on the stock market last year.

'This translates into a preference for banking- and healthcare-related stocks, while cyclicals (technology, consumer, communications) are underperforming due to rising bond yields', explain Danske Bank's teams.

Momentum is likely to remain limited ahead of the release of the US employment report at 2.30pm, which is expected to show a marked slowdown in job creation to 140,000 in December, compared with 199,000 in November.

Prior to this report, the week's indicators - weekly jobless claims and the ADP private employment survey - all pointed to an easing in the US labor market.

These elements will enable the Fed to confirm its pivot from a rate hike to a rate cut," says Bastien Drut, Head of Strategy and Economic Research.

Investors are also awaiting the ISM services index and industrial orders, which will provide further information on the health of the economy.

In the eurozone, the first estimate of eurozone inflation for December, to be published at 11:00 a.m., should show a temporary rebound in prices, mainly due to technical factors.

On the bond front, the yield on ten-year Treasuries is stabilizing below the significant 4% threshold, at around 3.99%, and that on the German Bund with the same maturity stands at 2.12%.

The euro is back down at 1.0930, pending the release of the latest inflation figures on the Old Continent.

Oil prices continue to benefit from geopolitical tensions: Brent crude is up 0.5% at nearly $78 a barrel, while US light crude (WTI) is up 0.6% at $72.7.

The latter is heading for gains of 1.5% over the week.

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