Stock Market: The Bond Market Kicks Off the Year-End Rally

Operators indicate that the Treasury is considering bond buybacks in the market as early as next week. This prospect brings renewed visibility and momentum to a bond market that has been subdued in recent weeks amid widespread caution. The buyback operation is expected to involve an amount between 5 and 7 billion dirhams, sending a positive signal regarding the strength of public finances. These operations allow the Treasury to repurchase outstanding bonds in the market to improve its debt profile. They are often conducted in a favorable public finance context and help convey positive signals about the financial health of the state. This improvement in the bond climate also acts as a catalyst for the stock market. Taking advantage of this more favorable context, the Casablanca Stock Exchange has shown a marked increase since Wednesday. The benchmark index has surpassed an intermediate resistance level around 18,700 points, reaching a one-month high. This technical signal reinforces the idea of a potential year-end rally, supported by improving macroeconomic fundamentals. On Tuesday, Bank Al-Maghrib contributed to this confidence boost by once again raising its growth forecasts for the current year, now expected to be 5%. At the same time, the central bank revised its inflation expectations downward, confirming a more favorable price trajectory. This dual revision creates a particularly favorable configuration for financial markets. Robust growth, controlled inflation, and easing rates thus form an environment conducive to continued improvement in financial conditions. In this context, investors continue to anticipate at least one more cut in the key interest rate in 2026, a scenario that would further enhance the attractiveness of financial assets, both bonds and equities. In the short term, the convergence of these positive signals reinforces the idea that the bond market plays a triggering role in the current dynamics, paving the way for a more active year-end in Casablanca after several months marked by contained volatility and moderate volumes.