Market: Tensions on rates ease a little

( – The Paris Stock Exchange should open slightly higher on Wednesday morning, catching its breath following its heavy decline the day before due to the reappearance of a strong selling trend on bonds.

Around 8:15 a.m., the ‘futures’ contract on the CAC 40 index rose by 24.5 points to 7962 points, suggesting a modest recovery after the fall suffered on Tuesday.

The Parisian market dropped 1.4% to 7920 points yesterday, breaking the important threshold of 8000 points above which it had been operating comfortably for more than a month.

The market climate has once again been weighed down by the tensions affecting the American bond sector, synonymous with ever-increasing debt servicing.

With economic indicators surprising on the rise in the United States, market participants are questioning the ability of the Federal Reserve to reduce its rates, as planned, in the coming months.

Investors are wondering how high yields will continue to rise and when they will start to cause damage to the real economy.

The surge in the yield on ten-year US Treasuries beyond 5% last October, for the record, resulted in a phase of consolidation for the world stock markets.

The ten-year paper, which reached five-month highs yesterday, is currently stabilizing below 4.66%, a level slightly lower than yesterday’s peaks.

On the European bond market, benchmark yields are following suit: that of the ten-year German Bund is down slightly to around 2.48%.

Stakeholders also fear that the high level of yields will prevent stocks from responding positively to the corporate results season which is currently in full swing.

The Dutch semiconductor industry giant ASML reported unsurprising first quarter results this morning and confirmed its annual forecasts, but announced a 5% increase in its dividend.

The economic agenda, however, looks relatively calm.

The final inflation figures in the euro zone for the month of April will be published in the morning, but they are rarely subject to revisions compared to initial estimates.

In the United Kingdom, inflation fell to 3.2% annualized in April, compared to 3.4% in March, paving the way for a future rate cut by the Bank of England.

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