The Paris Bourse should try to stabilize in an environment marked by the return of risk aversion. The recent sell-off is largely based on fears that the rapid expansion of the Delta variant could stem the recovery of the global economy as Japan declared a state of emergency within days of opening Olympic games, which will take place without an audience.
This deterioration in the health situation has led to a “flight to quality” towards government bonds. The question now is whether investors will stick to their recent strategy of capitalizing on any downturn in risky assets or interpret the bond market rally as a sign of a more uncertain economic environment.
Slight rise in the yield of the 10-year US dollar
The yield on the US 10-year bond edged up 4 basis points to 1.3378% after bottoming out at 1.25% on Thursday. It nevertheless shows a decline of 8 basis points over the week and 14 points since June. Beyond the risk that the Delta variant represents for the economy, other factors weigh on the trend such as the less accommodating tone adopted by the Fed, the tensions between Saudi Arabia and the United Arab Emirates, those between Beijing and Washington and the fall of Chinese tech stocks after Beijing’s offensive against listed companies abroad.
In New York, the three major indices gave ground on Thursday, while reducing their losses at the end of the session. In Asia, the Nikkei 225 ended down 0.6% on Friday and is now down 10% from its peak in February, while the CSI 300 of the main capitalizations of the Shanghai and Shenzhen stock exchanges lost 0, 2% as the close approaches.
Merger agreement between TF1 and M6
In the absence of a major economic indicator this Friday, investors will turn to Venice where the G20 of finance ministers and central bankers is held. This two-day summit will notably rule on the proposal of 130 OECD countries to adopt a minimum tax rate of 15% on multinationals.
The Bouygues group, RTL Group, and audiovisual groups TF1 and M6 announced Thursday the signing of agreements relating to the merger of TF1 and M6. The merger is expected to take place by the end of 2022.
Airbus announced that it had delivered 297 aircraft in the first half of 2021, while the aircraft manufacturer’s activity rebounded in June after a trough caused by the health crisis.
Dry. Kering Eyewear, the group’s luxury eyewear division, has signed an agreement with the Lindberg family to acquire 100% of Lindberg’s share capital.