After losing more than 1% at midday, the Paris Bourse managed to limit its losses in the second half of the session. At the final gong, the Paris index settled for a limited decline of 0.3% to 7,528 points, with Michelin down 3.1%, Eurofins Scientific down 2.7% and Stellantis down 2.3%.

Between the two rounds of parliamentary elections, markets have to contend with low visibility, both on potential reforms and on the future government's room for maneuver.

According to rumours, the latest meeting of ministers at the Elysée Palace suggests that 'chaos' will not spare the highest echelons of power, causing discomfort in the markets, which are unable to cling to any mobilizing scenario (either to re-buy, or to hurry to sell).

Investors are thus beginning to integrate the scenario of a paralysis of the political environment in France... which could be problematic, especially in the event of a downgrading of French debt this autumn.

Christopher Dembik, Investment Strategy Advisor at Pictet AM, warned this morning: "It is highly likely that the technical rebound seen yesterday will run out of steam due to a lack of drivers to sustain it".

"We think that the political risk in France will definitely take a back seat in the stock market - unless there is a surprise in the polls", he added.

Against this backdrop, investors this morning took note of the annual inflation rate for the euro zone. It came out at 2.5% in June 2024, compared with 2.6% in May, according to a flash estimate published by Eurostat, the European Union's statistical office.

German inflation, published a little earlier, came out slightly above consensus, while moving closer to the ECB's 2% target, giving traders hope of pleasant surprises.

On the bond front, the 10-year Bund hardly reacted at all (and continues to trade at around 2.600%), while the French OAT fared better with -2pts at 3.3270%, i.e. a spread of around 72 points (10 less than 3 sessions ago).

The US T-Bond is easing by 5pts to 4.4400%, which has no impact on the E/$ parity, which seems to be stuck at 1.0735.

Note the limited rise in Brent crude oil prices, up 0.2% to $86.8 (closing the bearish gap of April 30).

Professionals will also be counting on a promising crop of second-quarter results, starting next week, to bring market fundamentals back to the fore and restore the upward trend that has characterized stock markets since the start of the year.

In French company news, Sodexo reports sales for its third accounting quarter of 6.07 billion euros, up 5.6% year-on-year, including a negative currency effect of -0.2% and a contribution from acquisitions net of disposals of -1%.

Thales announces the inauguration of an assembly line to quintuple production of 70mm laser-guided rockets at its Herstal site in Belgium, in order to help strengthen the ammunition capabilities of Europe's armed forces.

Vinci announces that Nuvia, a Vinci Construction subsidiary specializing in nuclear projects and services, has finalized the acquisition of MBO Groupe, a major player in insulation, scaffolding and structural containment in France.

SLB and TotalEnergies announce a 10-year partnership to co-develop scalable digital solutions enabling access to energy resources, with improved performance and efficiency.

Finally, Stellantis announces that it has invested a further $55 million in Archer Aviation Inc, a company specializing in electric vertical take-off and landing (eVTOL) aircraft.

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