European markets react cautiously during early Monday trading
Markets opened on a mixed tone on Monday, from Tokyo to London, as bearish drivers remain ahead of a new week. Only small moves were registered on most benchmarks so far, with lingering uncertainties and a lack of cash in the US, due to a bank holiday (Juneteenth), explaining today’s lower market volatility. Monetary tightening and the prospect of slower growth or recession continue to dent investors’ appetite for riskier instruments. Many are waiting to see how central banks will manage to stabilize Bond markets without bringing more inflation in their economic areas, before adjusting their exposure to certain asset classes. Speaking of Treasuries, French bonds slid lower following the disappointing results of the election for President Macron who failed to get a majority at the Parliament, an outcome that will significantly threaten his reform plans for the country. The CAC-40 index trades close to its annual low, slightly below the 5,900.0pts mark so far. The lack of a strong bullish reaction over the 5,750/5,850 support zone could quickly lead to a sell-off extension towards 5,500.0pts and 5,050.0pts.
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