The Paris Bourse is set to open slightly higher on Wednesday morning, catching its breath after yesterday's heavy downturn due to the reappearance of a strong sell-off in bonds.

At around 8.15am, the future contract on the CAC 40 index was up 24.5 points at 7962 points, suggesting a modest recovery from Tuesday's plunge.

The Paris market had lost 1.4% at 7,920 points yesterday, breaking the important 8,000-point barrier above which it had been trading comfortably for over a month.

The market climate was once again weighed down by the tensions affecting the US bond market, synonymous with ever-increasing debt servicing.

With economic indicators in the US surprisingly on the rise, market participants are questioning the Federal Reserve's ability to cut rates in the coming months as planned.

Investors are wondering how high yields will continue to rise, and at what point they will start to cause damage to the real economy.

Last October's surge in the yield on US ten-year Treasuries above 5% had, for the record, resulted in a consolidation phase for the world's stock markets.

Ten-year paper, which had reached five-month highs yesterday, is currently stabilizing below 4.66%, a level slightly below yesterday's peaks.

On the European bond market, benchmark yields are following suit: the ten-year German Bund is down slightly at around 2.48%.

Investors are also concerned that high yields will prevent equities from responding positively to the corporate earnings season currently in full swing.

This morning, Dutch semiconductor giant ASML reported unsurprising first-quarter results and confirmed its full-year forecasts, but announced a 5% increase in its dividend.

The economic agenda, on the other hand, looks relatively quiet.

Final eurozone inflation figures for April will be published in the morning, but are rarely revised from initial estimates.

In the UK, inflation eased to 3.2% annualized in April, from 3.4% in March, paving the way for a future rate cut by the Bank of England.

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