Bourse Direct: Markets Decline Amid Geopolitical Tensions and Rising Rates
Paris stock exchange recorded its sixth consecutive session of decline. Geopolitical tensions and rising oil prices fueled inflation concerns, while bond yields continued to climb.
The Paris stock exchange registered its sixth consecutive session of decline, weighed down by resurgent tensions between Washington and Tehran and a rise in oil prices, reigniting inflation worries. The expiration of the interim agreement between the US and Iran, coupled with an offensive tone from the US president, heightened market tensions. Concurrently, bond yields continued their ascent.
The US 30-year Treasury yield reached 5.32%, its highest level since June 2007. This pressure extended to major European and Japanese sovereign debts, against a backdrop of persistent inflation, high public deficits, and less sustained demand for very long-term bonds. Financing needs were further amplified by massive investments in AI-related infrastructure, such as data centers, intensifying competition for capital.
Technically, the CAC 40 futures contract continued its consolidation movement after reaching the target of its previous trading range at 8,740 points. As long as the 8,490-point level, and particularly the lower boundary of the ascending wedge formed since March, remains preserved at closing, the technical configuration stays constructive. The bullish bias retains its preeminence, with the next target at the intermediate resistance of 8,904 points.
Conversely, a breach of this warning zone would signal a weakening of the medium-term bullish dynamic and pave the way for a retreat towards the wedge's first target at 8,284 points. A break of this pivot level, on which the index previously performed a throwback, would lead to the re-entry of the previous consolidation range, between 8,298.5 and 7,861 points. Such a configuration would invalidate the bullish construction and favor a continuation of the downward movement towards 7,861 points, potentially extending towards the wedge's second target at 7,838 points.
Bourse Direct continues to build its "Dynamique" and "Investisseur" portfolios as new technical configurations emerge. The firm favors a gradual strengthening of its bullish exposures as the lower boundary of the wedge is approached, provided the alert level remains intact. A disciplined approach to risk management is maintained, with readiness to adjust or reverse positions if identified technical levels are breached, potentially confirming a more marked resumption of the consolidation movement.