The Paris Bourse is off to a poor start to its 4th quarter (Friday was the '4 Witches'), losing more than 1.5% below 7,300pts (at 7,265).

Wall Street has reopened without direction: the Dow Jones and Nasdaq remain perfectly stable, but the S&P500 claws back -0.15%.

The CAC40 was clearly weighed down by Sté Générale's -12.3% (to 23.2E) disappointing targets, and the announcement of a less generous dividend payout.
More generally (as the Euro-Stoxx50 also dropped -1.3% to 4,240), investors are staying away from risky assets 2 days ahead of the Federal Reserve's eagerly-awaited announcements.

This consolidation comes after 2 sessions of strong gains, despite interest-rate markets worsening in the meantime, after a short-lived tip of the hat to the scenario of rates stabilizing at 4.00% for a few quarters. a
There is little suspense about the Fed's monetary policy decision on Wednesday: in all likelihood (FedWatch consensus 99%), it will opt for a 'status quo' on rates.

"This choice is due to the fact that inflation and the labor market are both moving in the right direction from the Fed's point of view, making further rate hikes less necessary", explains Commerzbank.

Above all, however, investors are awaiting projections and statements from Fed Chairman Jerome Powell, which could foreshadow a rate hike in early November.

Analysts believe that the +35% rise in oil prices since the end of the summer, and the healthy state of the US economy, are likely to push the Fed to maintain its restrictive approach.

In parallel with the Fed's decisions, the markets will be awaiting the decisions of the Bank of Japan and the Bank of England, which is expected to announce a further 25 basis points of rate tightening on Thursday.

The weekend in Europe will also be punctuated by the results of the monthly purchasing managers' surveys (PMI) on private-sector activity in the eurozone economies.

Recent data tend to suggest that Germany, the region's leading economy, has already entered recession, and that France may soon follow suit.

While caution is likely to limit risk-taking, the oil sector should still benefit from the continued rise in crude oil prices, buoyed by signs of recovery in China and the resilience of the US economy.

The price of a barrel of Brent is still up 0.5% at $94.75, while US light crude (West Texas Intermediate, WTI) is also up, at around $91.6, its highest level since November 2022.

On the bond front, the 4th quarter is also off to a poor start, with +4 basis points on our OATs and Bunds at 3.256% and 2.709% respectively.
Italian BTPs are stretched by +5.5Pts to 4.516%, which is starting to get very tense!

US T-Bonds limit the damage with +1Pt to 4.332%... but the '10-yr' tested 4.36% during the session: annual ceiling retraced to the nearest tenth!
The Dollar gives up nothing and remains on its recent highs at 1.0675.

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