(News Bulletin 247) – The Paris Stock Exchange should open Monday morning for the first session of the second quarter without much change, as investors seem to want to take a break before the shortened week of Easter.

Around 8:15 a.m., the ‘futures’ contract on the CAC 40 index – April delivery – picked up four small points at 7338, suggesting that the session was about to break even.

Despite the tremors that shook the banking sector in March, the Parisian market ended with solid gains in the first quarter, the first three months of the year having ended with an increase of more than 13% of the CAC.

The reopening of the Chinese economy, the absence of a real energy crisis in Europe and rather reassuring economic indicators improved the general sentiment on the equity markets.

But the prevailing optimism could gradually give way to caution before several important meetings and as the long Easter weekend approaches.

All Euronext places will be closed for Good Friday and Easter Monday, while US markets will remain closed on Friday.

The stock market rebound risks being weakened by multiple unknowns which seem for the moment to limit the upside potential of equities and take precedence over hopes of a ‘soft landing’ for growth.

“We expect these concerns to gradually ebb and central banks to continue their rate hikes, but we also recognize that visibility is low,” admit the Danske Bank teams.

A series of leading economic indicators will be released this week, which could both support market sentiment while heightening monetary policy questions.

In addition to the European manufacturing PMIs and the American ISM forecast today, are expected this week the figures for industrial production in the euro zone as well as the figures for American employment.

On the bond side, yields on benchmark government bonds fell in parallel with the recovery in equities, which shows that interest rates are close to their inflection point.

The ten-year German Bund yield is now back below the 2.30% threshold, while its American equivalent is stabilizing around 3.50% after having exceeded 4% in early March.

Investors are hoping the US Federal Reserve will confirm its more dovish tone adopted since the banking crisis, even as the US economy continues to hold up well.

Investors are also counting on the next season of first quarter results, which will begin in the middle of the month, to regain some momentum.

Earnings for US S&P 500 companies are expected to fall 6.6% on average in the first three months of the year, according to FactSet data, but their forecasts could turn out to be much more promising.

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