After last week's sharp rebound, the Paris Bourse's fine performance will be put to the test this week with a slew of economic indicators, starting with the latest US inflation figures.

At around 8:15 a.m., the future contract on the CAC 40 index was trading at around 8222 points, up 14 points, a harbinger of a continuation of last week's recovery.

The Paris market gained almost 3% over the past week to set both a new all-time intraday high above 8259 points and a new all-time closing record above 8219 points.

Market optimism is not just supporting the CAC, as all-time highs have been raining down across Europe over the past ten days, from London to Frankfurt to the pan-European STOXX 600 index.

Risk appetite is rising again across all markets with remarkable consistency, from equities to bonds, credit and commodities", points out Florian Ielpo at Lombard Odier.

U.S. equity markets - which have now risen for three weeks in a row - are just a stone's throw away from their all-time highs.

While the speed and scale of these gains may give rise to fears of an imminent downturn, the market could well find fresh impetus if the CAC manages to sustainably climb above its major resistance level of 8250 points.

Up to now, the 8250-point threshold has been an important management point for investors, synonymous with partial profit-taking, which has prevented them from rallying to the psychological 8500-point threshold.

The Paris market's ability to break above this key level will be tested over the next few days by a busy schedule of indicators, including retail sales and industrial production figures from across the Atlantic.

These figures will be closely watched, as the picture painted by recent US statistics has been a little more mixed of late, pointing to a slowdown in growth.

For example, US consumer sentiment fell in May to its lowest level for six months, due to a bout of pessimism surrounding inflation, but also unemployment and interest rates.

The highlight of the week, however, will be the US consumer price figures for April, due on Wednesday.

While inflation has tended to surprise on the upside in recent months, investors are counting on a slight slowdown in price rises, which would validate the scenario of further rate cuts.

We recommend building portfolio positions according to all possible scenarios, but with a bias towards the prospect of rate cuts", stresses Angelo Kourkafas, strategist at Edward Jones.

Also on the week's agenda is a speech by Fed Chairman Jerome Powell at the annual conference of the Foreign Bankers Association in Amsterdam.

While 92% of S&P 500 constituents have already published their quarterly results, several US retail heavyweights are still due to report their accounts this week, including Walmart and Home Depot.

US networking equipment giant Cisco will also publish its first-quarter performance.

In Europe, several leading groups such as Allianz, Bayer, Deutsche Telekom, Siemens and Vodafone are also due to report their results this week.

Copyright (c) 2024 CercleFinance.com. All rights reserved.