The CAC in Paris is trying to turn things around, as we are sitting right at a major support level. With this, the market seems to be looking to turn things around, despite the potential ECB rate hikes.
CAC 40
The Parisian index is up a little bit during the trading session here on Wednesday, as we continue to see the €8,100 level offer a little bit of support. It is worth noting that we are in an oversold area on the stochastic oscillator, right at a support level. So, it does make a certain amount of sense that there would be a little bit of resilience as market memory continues to play its part.
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French and German yields remain elevated, and this is causing some problems in the European Union as markets are trying to price in more ECB tightening in response to inflation risk, particularly from energy. French 10-year yields have recently reached their highest level since 2008. Some of the modest recovery comes from lower oil prices, slightly easier U.S. Treasury yields, and improved risk appetite before the Federal Reserve decision.
Some of the biggest movers right now in Paris
BNP Paribas is up a little bit over 1%, Schneider Electric is up about 1%, and Legrand is up 1.2%. There are a few laggards out there keeping the rally a bit suppressed, such as Stellantis and Renault, but all things being equal, this is an area that looks like traders are going to be watching very closely.
If the market were to break down below the €8,000 level, that would be a major breach of support. But as things stand right now, this is a market that looks like it is at least trying to get back to some form of positivity for the bulls to take over again.
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