The Paris stock market got the week - and the month - off to a good start, gaining nearly 0.6% to 8040 points, helped by performances from Carrefour (+3%), STMicro (+2.4%) and Teleperformance (+2%).

After a lacklustre May (+0.1%), the Paris market is hoping to get back on track and return to its recent record highs, even if the gaps may remain relatively small before the major events of the next few days.

Indeed, investors are likely to adopt a wait-and-see attitude ahead of what promises to be a busy week, both in terms of monetary policy and economic indicators.

Despite last week's better-than-expected inflation figures, there is little doubt that the ECB will cut rates on Thursday in order to support the resumption of growth in the eurozone.

The most interesting point, however, will concern the trajectory of its rates after June, as the re-acceleration of inflation is likely to fuel debate around a possible ECB 'pause' in July.

"The market will have to navigate by sight regarding monetary policy in the months ahead, which should generate volatility", warns Christopher Dembik, investment strategy advisor at Pictet AM.

Against this backdrop, the debt market remains closely watched. After last week's bout of tension, the yield on the 10-year German Bund is down to around 2.62%, compared with over 2.67% on Friday evening.

But it is the yield on French OATs that will be particularly closely watched this morning, following S&P's decision to downgrade France's credit rating. The latter is trading at around 3.11%, down 2 points, showing that the downgrade had already been anticipated by the markets and priced in.

In the US, bond yields are easing modestly, with ten-year paper falling back to 4.47%.

Another major event of the week, the US employment report - expected on Friday - should confirm that the US job market remains solid.

The day's macroeconomic agenda also promises to be busy, as European investors will follow the publication of the final PMI indicators for the manufacturing sector in the early morning.

The US ISM will be published in the afternoon.

On the energy market, oil prices are little changed despite OPEC+'s decision to extend its production cut to support prices.

Brent crude is down 0.5% at $81.2.

In French company news, Casino announced on Friday evening the sale of 90 stores to Groupement Les Mousquetaires and Auchan Retail France.

Atos reports that it has received two revised proposals for financial restructuring, from EPEI in association with Attestor Limited on the one hand, and from a consortium comprising Onepoint, Butler Industries, Econocom and certain creditors on the other.

Airbus announces that a consortium of Japanese companies led by NTT Docomo and Space Compass, in collaboration with Mizuho Bank and the Development Bank of Japan, has committed to invest $100 million in AALTO HAPS.

Finally, PT Len Industri (Persero) and Thales signed an agreement on May 30, 2024 to create a joint venture (JV) aimed at improving Indonesia's defense capabilities by strengthening local industrial activities in manufacturing, engineering and services.

Copyright (c) 2024 CercleFinance.com. All rights reserved.