The Paris Bourse began Thursday morning's trading session with little change, as investors preferred to ease off a few hours before the eagerly-awaited announcements by the European Central Bank (ECB). The CAC40 index rose by just 0.2% to 8060 points.

The ECB will announce its decision on key interest rates at 2.15pm, before President Christine Lagarde speaks at a press conference at the institution's Frankfurt headquarters.

With the European economy having been languishing for a year now, investors will be paying close attention to its comments, looking for the slightest hint of future rate cuts.

However, strategists and economists are warning that little can be expected from today's meeting.

While the recent fall in inflation seems to have strengthened the case for an ECB rate cut in June, the central bank is likely to reiterate its 'data-dependent' approach once again.

Following yesterday's higher-than-expected inflation figures in the US, the growing uncertainty surrounding future Fed rate cuts could also influence its language.

According to the CME's FedWatch barometer, traders now assess the probability of a 25-point rate cut in June at just 17.9%, compared with 59.1% last week.

For many analysts, it remains unlikely that the ECB will decide to cut rates before the US Federal Reserve starts its own monetary easing cycle.

'The Fed gives direction and the ECB follows. This is a widely held view", recalls Bruno Cavalier, economist at Oddo BHF.

"The leader-follower pattern is one that has been observed in several past monetary cycles, but not in all of them", he moderates, however.

Against this wait-and-see backdrop, the euro continues to weaken, towards 1.0740, but is still moving within the corridor of between 1.05 and 1.11 that has characterized parity since the start of 2023.

We believe that the US dollar should gradually appreciate against the euro over the next three to six months, for both cyclical and structural reasons, and cross the 1.05 threshold", emphasizes Mabrouk Chetouane, Head of International Market Strategy at Natixis Investment Managers.

On the bond market, government bond yields are stabilizing in anticipation of the ECB meeting, at 2.43% for the German ten-year.

On the oil front, prices remain close to peaks since late November, due to supply disruptions and signs of firming demand.

The price of a barrel of US light crude (WTI) is back above the $86 mark, despite yesterday's announcement of a further increase in US crude inventories last week.

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