(News Bulletin 247) – The forces balanced out on Thursday, at the end of an ECB Board of Governors marked by a last-minute surprise, as Frederik Ducrozet (Pictet WM) had anticipated, in particular because “the pressure could be part of the ongoing negotiations on the anti-fragmentation tool” and because the Governing Council may have received early evidence of a sharp rise in inflation expectations from the ECB Survey of Professional Forecasters (SPF).”
Namely that the ECB has increased its interest rate – if one could speak of rent – by 50 bps against 25 very widely anticipated. “A bit of a bang”, for Ulrike Kastens, Europe economist, DWS. “Given the high inflation rates, this move is more than welcome and should also support the euro exchange rate. However, concerns about inflation developments have intensified further. in the ECB’s communication, in particular because the rise in prices is spreading to more and more segments. Consequently, the risks for the inflation trend have not only increased, but have even increased .”
Like the Federal Reserve, the ECB has also indicated that it will continue to normalize its monetary policy at its next meetings. She said further rate hikes “would be relevant” in the future in the face of runaway inflation and that their trajectory will continue to depend “on the economic data” to come. The institution has also given the green light to the implementation of a new “anti-fragmentation” instrument, the Transmission Protection Instrument.
In terms of statistics on Thursday, the targets are missed, by little it is true for the weekly registrations for unemployment benefits, but in very significant proportions concerning the manufacturing index of the Philadelphia Fed, which stumbles to -12.3 this month.
On the stock side, Publicis gained more than 5% (5.05% to 49.50 euros), the group having raised its annual outlook and now anticipates organic growth over the whole of 2022 of between +6 and +7% against + 4 to +5% previously, an operating margin rate of between 17.5% and 18%, compared to around 17.5% previously.TotalEnergies lost 2.7% in the wake of the fall in oil prices, weighed down by the increase in gasoline inventories in the United States. SEB plunged by 10.2%, the small electrical appliance specialist lowered its assumption for growth in sales and operating profit from activity for 2022. operating margin on activity of between 8% and 8.5% over the year.
On the other side of the Atlantic, the main equity indices continued to rise on Thursday, with the Dow Jones gaining some 0.51% to 32,036 points, and the Nasdaq Composite gaining 1.36% to 12,059 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained nearly one percent, just missing the symbolic 4,000 points.
A point on the other risky asset classes: around 08:00 this morning on the foreign exchange market, the single currency was trading at a level close to $1.0190. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $97.20.
To be followed as a priority on the statistical agenda this Friday, to follow a battery of PMI activity indicators (surveys of purchasing managers). Synthetic data for the entire Euro Zone will be released at 10:00 am. This is a major barometer with a high potential impact.
KEY GRAPHIC ELEMENTS
The painting (its backdrop in any case) is dark.
The sell signals have multiplied since the combination of “evening star” candles (May 27, 30 and 31). The openings successively in bearish gap of the last two sessions of week 23, then of the first session of week 24, were accompanied by a continuous mobilization of the selling side during the session and closing on the low points of the session. All in sharply rising volumes. The momentum of participation will have followed that of the clearings, even as the CAC will have re-entered the lower part at a bearish slant that retains its resistance attributes.
The technical rebound that began during the week (W25) remains anecdotal at this stage in view of the transaction volumes accompanying it and in view of the initial losses. It came to an early halt, and the resumption of selling pressures, on gaps, on breach of the symbolic threshold (6,000 points), and in high volumes, augurs a continuation of clearances.
Tuesday, July 05, the traced candle combines worrying characteristics, its structure with an elongated body without a wick, materializing a mobilization of the selling camp throughout the session, all in relatively heavy volumes, and on breaking the technical threshold.
The flagship index made a school pullback (graphic rejection) at 6,000 points. After a phase of congestion, a rally of 6,200 points was operated, with cleaning of the remainder of the gap of June 13th. However, the session of July 19 does not shine by its volumes, nor by its sectoral federation.
FORECAST
In view of the key graphic factors that we have identified, our opinion is neutral on the CAC 40 index in the short term.
We will take care to note that a crossing of 6248.00 points would revive the tension in the purchase. While a break of 5900.00 points would relaunch the selling pressure.
Hourly data chart
Chart in daily data
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