(CercleFinance.com) – The Paris Stock Exchange is expected to extend its spectacular rebound signed on Friday on Monday morning, still favored by the easing of tensions on the bond compartment.
Around 8:15 a.m., the futures contract on the CAC 40 index – due July – rose 43 points to 6107 points, announcing a continuation of the upward trend.
After the period of gloom known in the middle of last week, a real wave of euphoria swept through the Parisian market on Friday, which resulted in a gain of more than 3.2% for the CAC at the final bell. .
This vigorous recovery enabled the star index to go back beyond the threshold of 6,000 points and bring its weekly increase to around 2.5%.
Investors seem to be regaining some appetite for risky assets due to the marked easing that is currently taking place on the long-term interest rate market.
The bond compartment indeed had a magnificent week, which ended almost at a high in Europe and at high levels in the United States.
While the yield on ten-year Treasuries is tightening slightly towards 3%, it confirms its return towards the psychological threshold of 3% after it flirted with the 3.5% mark less than a week ago. .
The New York Stock Exchange also had a strong session on Friday, supported by less bad than expected economic data, in particular a consumer confidence index from the University of Michigan showing a slightly less pessimistic inflation outlook for American consumers.
“This suggests that the urgency for aggressive monetary tightening from the Fed is becoming less compelling,” one trader said.
This assumption has made it possible to relegate for a time to the background the growing risk of a recession, which until now led many managers to underweight equities.
“The scenario of a recession implies another 10% decline for European equity markets, but our base scenario excludes any downside potential over the coming months,” reassures one at BofA.
Investors will learn on Wednesday of the third estimate of US GDP for the first quarter, which could provide more information on the imminence of a recession in the United States.
The week will also be punctuated by the results of the monthly surveys of purchasing managers (PMI) on service activity in the manufacturing sector.
The tightening of monetary policies by central banks – which aims to combat record inflation – will also remain a major point of attention, given the risks that this tightening poses to economic growth.
The European Central Bank today opens its annual forum in Sintra, in the south of Portugal, which will be marked this evening by a much-awaited speech by its president, Christine Lagarde.
However, volatility could remain high during this transition period marked by low visibility, a phenomenon that leads strategists to recommend that investors maintain a good diversification of their portfolio in order to be able to face all possible scenarios.
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