(CercleFinance.com) – The Paris Stock Exchange should recover somewhat on Friday morning, after dropping more than 3% the day before, triggered by a sharp rise in bond yields in the prospect of a tightening of the monetary policy of the Fed.
Around 8:15 a.m., the futures contract on the CAC 40 index – due at the end of July – advanced 12.5 points to 7103.5 points, suggesting a timid rebound at the opening.
The Parisian market has had a difficult week so far, characterized by four sessions in the red, a movement of consolidation which finally led it to break through its major support of 7150 points.
Over the week as a whole, the CAC is at this stage down by around 4.3%, leading some investors to believe that the correction repeatedly mentioned by strategists is now indeed there.
For several months, some analysts have been concerned about the ‘cognitive dissonance’ of the markets, which favor the ‘pink’ scenario of an absence of recession and a rapid normalization of inflation.
Investors were overtaken by monetary policy issues yesterday as US labor market data heightened fears of further rate hikes from the Fed.
On Wall Street, the Dow Jones ended down 1.1% last night and the Nasdaq fell 0.8%.
Additional pressure on equity markets came from the sharp rise in government bond yields, an overly sharp rebound of which has often been the cause of a stock market correction in recent years.
The ten-year American still stands above 4%, at four-month highs, while its German equivalent is hovering around 2.6%, against 2.2% a week ago.
Investors are now waiting to take note of one of the most fundamental indicators for the economy, namely job creations for the month of June in the United States.
Economists are hoping for confirmation of the trend towards a slowdown in the pace of job creation, but the statistics have surprised on the rise after their last 14 monthly publications.
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