The Paris stock market is down nearly 0.8% this morning, around 7980 points, penalized in particular by Engie (-3%), Renault (-2.6%) and Bouygues (-2.2%).

Caution prevails in the wake of the ECB's first rate cut since 2019 and while awaiting the publication of the US employment report.

Yesterday, 'the rate cut reinforced the idea that global monetary policy was now heading towards an easing cycle, with further cuts on the horizon', points out Jim Reid, analyst at Deutsche Bank.

This is an important change of direction compared with the policy of the last two years, during which central banks rapidly raised rates to curb inflation", he adds.

The support measures unveiled yesterday by the ECB should also bolster the nascent recovery of the European economy, with growth now expected by the institution to reach 0.9% this year, compared with 0.6% up to now.

Deutsche Bank insists that "the markets will be able to benefit from the effect of the rate cuts as growth recovers and inflation largely normalizes, which corresponds to a 'goldilocks' scenario".

On Wall Street, the US equity markets are also heading for a positive week, thanks to the undeniable surge in Nvidia's share price, but the weekly results will depend heavily on the employment figures due out at 2.30pm.

For the record, the consensus forecast is for 180,000 jobs created in May, which would mark relative stability compared with 175,000 the previous month.

Given that the latest indicators (ADP, jobless claims, etc.) have pointed to a clear slowdown in the labor market, a lower-than-expected figure would suggest that the Fed will soon be cutting rates.

"Given that they had indicated that an unexpected deterioration in the labor market could precipitate rate cuts, we could expect a fairly dovish tone for next week's FOMC in the event of a mixed employment report", points out Bastien Drut, Head of Strategy and Economic Research at CPRAM.

The unemployment rate will also be closely watched: at 3.9%, it has been hovering below the 4% mark for over two years now, a level not seen since the 1950s.

Beyond the employment figures, investors know that a rate cut in the US is essentially conditional on inflation returning below the symbolic 3% threshold.

Christopher Dembik, Investment Strategy Advisor at Pictet AM, points out that "consumer prices absolutely have to be below this level for several months in a row before the Fed can consider initiating an easing cycle".

On the bond front, markets are still not celebrating yesterday's rate cut by the ECB.

Ten-year German Bund yields are hovering above 2.55%, while on the other side of the Atlantic, US T-Bonds of the same maturity are stabilizing at around 4.29%, pending employment figures.

On the energy market, Brent crude oil is down 0.5% at $79.6 a barrel.
In French company news, Renault Group presents its new-generation 100% automated logistics tool, equipped with a system from Exotec, a French industrial robotics company, at its largest after-sales warehouse in Villeroy.

Renewable energies group Neoen announces that at the close of the exercise period, which was open from May 22 to June 5 inclusive, 74.53% of rights had been exercised in favor of payment of its dividend in shares.

Finally, LDC announces the conclusion of an asset purchase agreement with Konspol Holding, a subsidiary of the Cargill group, with a view to acquiring the Konspol brand in Poland and its Nowy Sacz plant, which generated sales of 35 million euros in 2023.

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