The Paris Bourse is set to continue consolidating in early trading on Wednesday, ahead of Fed Chairman Powell's address to Congress later this afternoon.

At around 8:15 a.m., the future contract on the CAC 40 index (July maturity) was down three points at 7,300 points, pointing to a very slight decline at the opening.

By yesterday's close, the Paris index had lost almost 0.3%, breaking through its pivotal 7300-point support and continuing the downward trend that began at the start of the week.

After a good run in June, the equity markets seem intent on catching their breath until the economy and monetary policy become a little clearer.

On Wall Street, too, investors are taking profits following an upward sequence that has seen the S&P 500 index post five consecutive weeks of gains, the first since the end of 2021.

The Dow Jones dropped more than 0.7% on Tuesday evening, while the Nasdaq Composite gave up nearly 0.2%.

Buoyed by the craze surrounding artificial intelligence stocks, US equity markets have been climbing steadily since the beginning of March.

At this stage, it seems only natural to see a short pause to digest this particularly strong movement.

Investors will once again be looking to Jerome Powell in the hope that the Chairman of the US Federal Reserve will dispel some of the vagueness surrounding monetary policy issues.

The Fed boss's hearing before the House Financial Services Committee is scheduled for 4:00 pm (Paris time).

'This meeting should be the key event of the week, but as it comes just after the Monetary Policy Committee meeting, it's hard to imagine that it could reveal anything very new', warn the teams at Kiplink Finance.

Faced with the intense debates at the Fed, Powell is likely to continue to insist on the need to assess the lag in monetary policy measures, without committing to a further rate hike in July.

On the currency markets, the dollar, which had advanced yesterday following better-than-expected real estate statistics, continues to gain ground to break through the 1.09 mark against the euro.

The bond market continued its erratic movements of recent days, with the German Bund yield returning to 2.40%, while the French OAT yield eased to 2.92%.

Treasury yields, which had climbed in recent weeks, followed suit, with the 10-year note falling back to 3.73% from last week's peak of 3.84%.

On the oil front, crude prices recovered slightly in a market that was also highly volatile, torn between the threat of a slowdown in the US economy and hopes of a recovery in growth in China.

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