(News Bulletin 247) – The CAC 40 rose sharply in mid-session on Friday, reassured by the approval of the Senate on the agreement to suspend the debt ceiling of the United States. Market operators are also awaiting the release of US employment figures this afternoon.

The market can now turn the page on the tragicomedy of the US debt ceiling and move on. The Senate indeed approved on the night of Thursday to Friday the bipartisan agreement allowing to suspend for two years this ceiling and thus avoid a default of payment of the United States.

This restores color to the CAC 40 which won 1.2% at mid-session at 7223.97 points, limiting its decline over the week to 1.3% for the moment.

“Now that the agreement on raising the US debt limit has been voted on by moderates in Congress (…), the risk of US technical default is coming off the radar, at least until 2025. This is positive in this beginning of June after banking, inflation, economic and geopolitical risks weighed on the performance of assets in May”, judge Xavier Chapard of La Banque Postale Asset Management. “However, the list of uncertainties and risks remains long for this summer and we maintain a cautious allocation,” he adds.

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Heading for American employment

With this risk in the rearview mirror, market operators will reserve their attention for the release of US employment figures for May, published at 2:30 p.m. Economists surveyed by the Wall Street Journal anticipate 190,000 job creations and an unemployment rate of 3.5%.

These data will once again fuel market speculation on the intentions of the US Federal Reserve (Fed) at its next monetary policy meeting on June 13-14. Investors are relatively divided for now. According to the CME Group’s FedWatch tool, they expect less than 30% on a 25 basis point increase (or 0.25%) in key rates and just over 70% on a status quo.

As for stocks, the renewed appetite for risk favors cyclical stocks, with Renault in the lead (+3%, the largest increase in the CAC 40), ahead of ArcelorMittal (+2.7%) and Saint-Gobain (+ 2.6%).

On the smallest values, AB Science (+4%) is driven by obtaining a patent in Canada for its flagship molecule, mastinib.

On the other markets, the euro is stable against the dollar at 1.0764 dollars. Oil contracts are advancing a little, also benefiting from the return of risk appetite. The North Sea Brent contract for August is up 1.7% at $75.52 a barrel while the July contract is also up 1.7% at $71.28 a barrel.