After two consecutive sessions of gains, the Paris Bourse is set to continue its advance on Friday morning, in the hope that the employment figures to be released this afternoon in the USA will confirm the slowdown in the US labor market.

At around 8:15 a.m., the 'future' contract on the CAC 40 index - July delivery - was up 13.5 points at 7,720 points, suggesting a favorable start to the session.

After four weeks of intense turbulence, the Paris market seems to have calmed down since the start of the week, but remains weakened by the uncertainty surrounding the outcome of Sunday's second round of legislative elections.

At this stage of the week, the CAC 40 is still posting a weekly gain of almost 3%.

Unless there is a major error in the polls, the political situation in France should be a little less of a marker for the CAC 40 over the next few sessions", says Christopher Dembik, Investment Strategy Advisor at Pictet Asset Management.

"This makes sense: on average, over 60% of the sales of the major companies on the list are generated abroad", he explains.

"This puts the immediate effect of the legislative elections on these companies' business into perspective", concludes the analyst.

In a strategy note published yesterday, Morgan Stanley's strategists consider that now is a good time to buy French equities in view of a possible 'rally' of relief following Sunday's vote.

In the UK, Labour's unsurprising victory in yesterday's general election, which ended 14 years of Conservative rule, is being greeted without emotion by the markets.

However, caution is likely to be the watchword ahead of the release of monthly employment figures in the USA, which are likely to influence the Fed's next decisions.

The US labor market has been slowing slowly but surely for several months, which could prompt the central bank to clarify its rate-cutting schedule soon.

The consensus is for a slowdown in non-farm payrolls to 190.000 in June, with the unemployment rate unchanged at 4%.

While investors will only have their eyes on employment statistics in the USA, they will also be scrutinizing industrial production figures in Germany, followed by retail sales in the eurozone, expected later this morning.

While the New York Stock Exchange was closed yesterday for Independence Day, the equity markets are also gearing up to end the week on a positive note.

Over the week, which was shortened by the bank holiday, the Dow Jones posted a small increase of around 0.5% since Monday, while the Nasdaq gained a more convincing 2.5%.

On the European bond market, the yield on the French ten-year OAT eased to 3.27% following yesterday's successful Treasury auctions.

The German Bund is still trading at around 2.60%, giving a stable spread of around 67 points, synonymous with a decline in the risk premium associated with French assets.

The oil market, for its part, is heading for a fourth consecutive week of gains, supported in particular by Wednesday's announcement of a fall in US crude inventories.

Brent crude is currently consolidating by 0.3% at $87.1 a barrel, while West Texas Intermediate (WTI) is down 0.2 at $83.7.

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