(News Bulletin 247) – The Paris Stock Exchange should open timidly higher on Friday morning, in markets that continue to react to the declared desire of the major central banks to continue their rate hikes.

Around 8:15 a.m., the futures contract on the CAC 40 index – June delivery – advanced 13 points to 7304 points, announcing a very slight increase at the start of the session.

Unsurprisingly, the European Central Bank (ECB) yesterday raised its key rates by 25 basis points, while expressing its intention to maintain a restrictive policy over time.

Adding to the lack of support from the ECB is the unaccommodative stance of the Fed, which has hinted unambiguously that it is planning two more increases in the interest rate this year.

“The central banks are not done with their tightening cycle, and the announcements of the week clarify this point if necessary: ​​other rate hikes are to be expected”, summarizes Raphaël Thuin, director of market strategies of capital at Tikehau Capital.

Some observers nevertheless point out that, despite a very firm rhetoric, the central banks have refrained from taking measures that are too penalizing for the markets.

Against the current of the Fed and the ECB, the Bank of Japan (BoJ) maintained its ultra-accommodating monetary policy on Friday, even if its trajectory could be revised in the months to come.

Some well-received economic indicators, having confirmed the good resistance of activity, have also fueled the optimism of investors across the Atlantic.

After a difficult start, the New York Stock Exchange ended with strong gains on Thursday, as stakeholders favored a positive reading of the many statistics published during the day.

The Dow Jones rose almost 1.3% and the Nasdaq Composite rose more than 1.1%.

While the VIX volatility index has rebounded towards 14.5 points, the ‘barometer of fear’ – as Wall Street calls it – continues to move to multi-year highs.

The reaction of the bond markets to the announcements of the Fed and then the ECB was insignificant, with a yield on the ten-year German Bund hovering around 2.50%.

On the US market, the ten-year yield was less than 3.73%, suggesting a generally stable trend over the week as a whole.

With investors starting to put the market risk linked to monetary policies into perspective, a calm session is looming in Europe, as on Wall Street.

The final figures for consumer prices in the euro zone for May and the Michigan consumer confidence index will be practically the only economic indicators published today.

However, this weekend could be marked by increased volatility due to the ‘four witches’ configuration, characterized by the expiry of many options contracts and ‘futures’ on indices.

Over the week as a whole, the CAC has so far posted a gain of around 1.1%.

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