(News Bulletin 247) – After its break last week, the Paris Stock Exchange should try to get back in the right direction of the market on Monday morning, in a market which remains however nervous at the prospect of a faster tightening monetary policies than expected.
Around 8:15 a.m., the ‘future’ contract on the CAC 40 index – March delivery – rebounded 45.5 points to 7242.5 points, announcing a modest recovery in early trading.
The Parisian market had ended Friday’s session with a marked decline of 1.8% to 7187 points, bringing its decline to more than 2% over the whole of the past week.
US stock markets also suffered losses of around 3% over the week, suffering their biggest weekly drop since the start of the year.
Investors seemed disconcerted by the publication of statistics which showed that the process of disinflation, which began a few months ago, could be much more chaotic than initially considered.
“Markets are adjusting to the risk of a stronger and longer tightening,” says Jeanne Asseraf-Bitton, head of research and strategy at BFT IM.
With inflation figures still far from their target, market participants are realizing that monetary policies will remain restrictive almost everywhere, and for a long time.
Activity on the markets should therefore remain limited by the reluctance of market players to take new positions pending the monetary policy meetings in March.
The European Central Bank (ECB) will convene its Governing Council in Frankfurt on Thursday March 16, followed the following week by the Federal Reserve, which will convene its Monetary Policy Committee (FOMC) on March 21-22.
After last week’s sharp decline, investors still seem to want to timidly return to riskier assets despite monetary uncertainties and persistent fears surrounding a possible recession.
If the CAC now tends to move away from its historical records reached in mid-February, the most optimistic will remember that the Parisian index lost only 2% during the recent consolidation phase.
In the economic chapter, investors will be particularly attentive to the publication, on Wednesday, of the latest European manufacturing PMIs before the publication, on Thursday, of the latest inflation figures in the euro zone.
After the European indicators, the market will follow, on Friday, the announcement of the ISM for services in the United States.
On the bond market, 10-year rates remain firm at over 3.9% in the United States, 2.5% in Germany and nearly 3% in France.
Faced with the risks surrounding growth, commodity prices continue to decline, with a barrel of American light crude around 75.8 euros.
On the currency side, the dollar continues to evolve at its highest, trading this morning around 1.0550 against the euro.
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