The CAC 40 retreats in the face of soaring bond rates
The CAC 40 is moving down sharply on Friday, falling 1.5% after a week of temporization, in the face of soaring bond rates. US and European rates are reaching levels not seen in more than 10 years in the face of expectations of even more aggressive monetary tightening by central banks. The US 10-year rate is now moving to 4.3%, from 3.6% at the start of the month, and the French 10-year rate is moving to 3%, from 2.4% at the start of the month due to a inflation more persistent than expected.
The Parisian index could thus return to test its recent lows at around 5600 points over the next few days, but the results of the GAFAM and the ECB’s monetary policy meeting will probably be decisive on the sentiment of operators next week.
The ECB is expected to raise rates again by 75 basis points next week to slow inflation and support its struggling currency against the dollar. Although this rate hike is expected by the markets, it should be accompanied by even more hawkish rhetoric from ECB officials, which could fuel risk aversion.
Daily chart of the CAC 40 price – key levels