The Palais Brongniart, former headquarters of the Paris Stock Exchange. (photo credit: / L. Grassin)
(CercleFinance.com) – The Paris Stock Exchange is expected to continue its decline on Monday morning, once morest a background of rising bond yields fueled by the tightening of monetary policies by the major central banks.
Around 8:15 a.m., the ‘future’ contract – May delivery – on the CAC 40 index dropped 58.5 points to 6175 points, announcing a start to the day in negative territory.
The Parisian market had ended Friday’s session with a loss of 1.7% to 6258 points, signing a fourth session of decline over the week, which resulted in a weekly decline of nearly 4.5%.
Equities continue to lose ground in a context of accelerating rise in real interest rates.
The yield on 10-year US Treasury bonds, whose surge has helped the stock market correction since the start of the year, climbed as high as 3.12% on Friday, bringing it closer to more than 10-year highs. .
Fear of an acceleration in monetary tightening was fueled last week by the announcement of a 50 basis point hike in the Fed’s key rates, the first since 2000.
The rise in long-term interest rates is reviving fears of an increase in the cost of corporate financing, and therefore of a slowdown in economic growth.
‘These fears regarding growth have weakened an already feverish market sentiment, especially following Xi Jinping reaffirmed his commitment to his policy of ‘zero Covid in China’, explains one at Liberum.
Despite better-than-expected US jobs stats, Wall Street ended Friday’s session in the red, with the S&P 500 posting a fifth consecutive week of declines.
On the corporate side, earnings season is coming to an end, as 90% of listed US companies and 75% of their European counterparts have now released their quarterly figures.
Groups like Bayer, Disney, Siemens, Allianz, Telefonica or Deutsche Telekom have yet to present their accounts this week.
In terms of statistics, investors will be paying attention tomorrow to the publication of the ZEW economic sentiment index in Germany, then to the consumer price index (CPI) in Germany scheduled for Wednesday.
The weekend should, for its part, hold some valuable indications regarding the evolution of inflation on both sides of the Atlantic.
The speech on Wednesday by ECB President Christine Lagarde at a conference in Ljubljana might provide more information on the possibility of a first rate hike in July from the from the European Central Bank.
