(News Bulletin 247) – The Paris Stock Exchange is expected to rise Thursday at the opening following the adoption by the US House of Representatives of the agreement to suspend the debt ceiling of the United States.
Around 8:15 a.m., the ‘futures’ contract on the CAC 40 index – June delivery – advanced 44 points to 7143.5 points, signaling the start of the session in positive territory.
The elected representatives of the House of Representatives voted yesterday evening in favor of the text by an overwhelming majority, 314 parliamentarians having voted for and only 117 against.
The deal – which calls for suspending the US government’s borrowing limit until January 2025 in return for a drastic cut in federal spending – must now be presented to the Senate, which is controlled by Democrats.
Investors had been betting for several days on an approval of the project, but were beginning to worry about the opposition expressed by a fringe of ultra-conservative Republican elected officials to the text.
The green light from the House, which fell after the close on Wall Street, seemed to have reassured investors, a relief largely perceptible on the dollar in Asian equity markets.
In Tokyo, the Nikkei index in Tokyo advanced 0.8% as the close approached, while the Hang Seng in Hong Kong also gained 0.8%.
On the foreign exchange market, the results of the vote provoked an initial reaction on the dollar, with the euro falling to around 1.0678 against the greenback.
On the bond side, the yield on 10-year government bonds fell below 3.64%, the removal of a default risk from the United States making American debt more attractive.
Note that this Thursday session promises to be busy, with in particular the publication of inflation in the euro zone for the month of May, expected below 6.5%, i.e. a lowest since the beginning of 2022.
The PMI manufacturing indices, also expected in the morning, should show that activity within the European industrial sector remains at its lowest since June 2020, when the economies were still confined.
In the United States are expected the ADP survey on private employment, the figures for registrations for unemployment benefits and then the ISM manufacturing index, which should not recover either.
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