CAC 40: geopolitical risk back on the agenda

(CercleFinance.com) - The Paris Bourse is set to open sharply lower on Friday morning in the face of mounting geopolitical tensions and rising US interest rates, suggesting a weekend below the 8,000-point mark.


At around 8.15am, the future contract on the CAC 40 index - for delivery at the end of April - fell by 60 points to 7,964.5, meaning that the psychological threshold is set to be breached at the opening.

After a complicated week, investors are still navigating by sight, trying to digest the implications of the latest events in the Middle East.

Iran reportedly repelled a drone attack overnight in what appears to be a possible military retaliation by Israel, raising fears of an escalation in the tug-of-war now being waged between the two countries.

Faced with the uncertainties linked to geopolitical tensions, market participants prefer to turn to assets deemed safer, such as the dollar.

Unsurprisingly, the oil market rebounded significantly, as developments in the Middle East fueled fears of a possible closure of the Strait of Hormuz and an American retaliation.

Brent crude climbed 1.9% to $88.8 a barrel, while US light crude (West Texas Intermediate, WTI) gained over 2% to $84.4.

Added to this is a sharp resurgence of tension on the US bond market.

Yields on US Treasuries, which had fallen back slightly mid-week, are back on the rise, with the 10-year rising to 4.65%, its highest level since November.

While trading may remain lacklustre in the absence of any major economic indicators, the day will nonetheless be marked by U.S. releases from American Express, Procter & Gamble and SLB.

Last night, Netflix unveiled quarterly results in line with expectations, but the stock fell by 5% in pre-market trading after announcing that it would no longer publish new subscriber figures in its quarterly accounts from 2025 onwards.

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