The Paris Bourse is set to open on a cautious note on Monday morning, against a backdrop of wait-and-see sentiment ahead of the release of US inflation figures on Thursday, and the kick-off of the US corporate earnings season the following day.

At around 8:15 a.m., the 'future' contract on the CAC 40 index - for delivery at the end of January - gave up 14.5 points at 7,417 points, heralding a continuation of last week's downward movement.

The Paris market had a difficult first week of trading in the New Year, losing around 1.6% in four days, which led it to breach the technically important 7,500-point threshold.

Wall Street also retreated for the first week of the year, with the Nasdaq losing more than 3%, ending a sequence of nine consecutive weeks of gains.

"After the sharp rise in the stock markets in recent months, it's no surprise that the markets are taking a breather", said Craig Fehr, analyst at Edward Jones.

In particular, investors have had to digest a series of economic indicators, led by employment, which have tempered the prospect of a rapid reduction in interest rates.

'Rates are going to come down', say the teams at Danske Bank. The question is when, and to what extent," asks the Danish bank.

Many strategists point out that stock markets tend to perform well before and after the Fed's first rate cuts, but investors will have to be patient before they can refine their estimates.

A "wait-and-see" mood is therefore likely to prevail ahead of Thursday's release of US inflation data, which will help determine the trajectory of the Federal Reserve's monetary policy.

According to consensus, the consumer price index (CPI) should have accelerated to +0.2% in December, from +0.1% in November, due to a slower decline in gasoline prices.

In its basic version, the CPI excluding volatile items such as food and energy should have fallen from +0.3% in November to +0.2% last month.

The fourth-quarter earnings season for US companies is due to kick off this Friday with the releases of major banking groups JPMorgan Chase, Bank of America and Wells Fargo.

Historically speaking, stock market performance in January is generally a good indicator of what lies ahead for the rest of the year.

According to data compiled since 1929 by S&P Dow Jones Indices and reported by broker John Hancock, in 70.5% of cases, the S&P 500 index posted a positive performance for the year as a whole, after gaining ground in January or suffering an annual loss when the market fell back in the first month of the year.

On the bond front, the yield on ten-year US Treasury bonds remained above the critical 4% mark, while its German equivalent confirmed its strength at around 2.16%.

On the energy market, oil prices are consolidating after their sharp rise of the past week, due to a new episode of localized geopolitical tensions in the Red Sea.

Brent crude is down 1.2% at $77.8 a barrel, while US light crude (WTI) is down 1.8% at $72.8.

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