The Paris stock market climbed 0.2% this morning, to around 7520 points, helped by EssilorLuxottica (+2.1%), Teleperformance (+1.6%) and Renault (+1.2%).

Remember that the Paris market fell by over 6% last week, a weekly decline unseen since the end of 2022, which sent the CAC into negative territory since the start of the year (-0.5%).

The euphoria of the start of the year has been replaced by a sudden correction and an abrupt reawakening of volatility, which has taken many investors by surprise.

The markets' mistrust of a possible rise to power of the RN or the new Front Populaire was quickly felt on the government bond market.

The spread between the yield on French ten-year OATs (3.15%) and the German benchmark rate (2.39%) widened sharply, approaching 80 basis points.

The fact that the surge in volatility was not confined to equities, as illustrated by the collapse of the euro over Friday's trading session, has prompted some observers to express concern about the ongoing stock market correction.

We fear that the yield spread on French bonds, the fall in equities and potentially the fall in the euro will persist at least until July 7", warns Christopher Dembik, investment strategy consultant at Pictet AM.

"Our scenario is based more on increased volatility, with phases of fall followed by rebounds rather than a continuous fall", he adds.

According to the analyst, everything will depend on the evolution of the polls.

Let's not forget that the political risk is not only French: the coalition in power in Germany is facing major differences over the budget, and a new government is due to be formed in Belgium", he points out.

The open question is how long this correction phase will last, and whether it marks the beginning of the end of the equity markets' rise.

Economic indicators, particularly those relating to inflation, which are likely to influence the trajectory of central banks' monetary policies, should therefore continue to have a major impact this week.

In French company news, Casino has announced the finalization of its share consolidation, through the exchange of one hundred existing shares for one new share, and the effectiveness of its capital reduction, through a reduction in the nominal value of the shares.

Thales announces that France's SIMu (Service Interarmées des Munitions) has signed an order for several tens of thousands of 120mm ammunition rounds, completing the order for 15,000 rounds signed in 2023.

Thales has also announced a contract with the Brazilian Air Force's DECEA, for the acquisition of Ground Master (GM 200 MM/A) all-in-one multi-mission radars, designed to enhance Brazil's air surveillance capabilities.

Finally, Airbus announces an order from Belgium for 15 H145M multi-role helicopters for the army, and for two of the same type, with three options, for the federal police.

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