(News Bulletin 247) – New nervous session, marked by indecision on Wednesday on the Paris market, whose flagship index, the CAC 40 ended on a flat note, slightly above 6,100 points, with one standard deviation however important, with the approach of the outcome, this Thursday of a Council of Governors of the European Central Bank (ECB). Meeting which should end with a 75 basis point hike in interest rates. Objective: to fight against inflation, always at the risk of penalizing economic activity, at the very moment when Moscow acts on the use of gas exports as a political weapon. Verdict at 2:15 p.m. for the monetary policy decision itself and at 2:30 p.m. for the Institution’s press conference, the slightest inflections in the elements of language will be scrutinized.
“It is difficult to imagine anything other than a “hawkish” speech by Christine Lagarde during the press conference which will follow the decision on the rates”, warns Alexandre Baradez (IG France)”, for whom “an overly balanced speech by the President of the ECB would also pose the risk of sending a message of convenience to the general public, strongly impacted by price increases.
“The markets continue to adjust to the degraded economic outlook and aggressive monetary tightening by central banks”, summarize the strategists of La Banque Postale AM.
In the macroeconomic chapter, the slowdown in the growth of Chinese exports, against a backdrop of contraction in global demand and the Zero Covid policy in several megacities, further weighed down the atmosphere. Yesterday, the revision of growth in Q2 in the Euro Zone, at +0.8% quarterly, allowed the single currency to control its hemorrhage.
On the stock side, Engie rose 5%, driven by press reports reporting that the price of electricity generated by nuclear and wind power producers could be capped at 200 euros per megawatt hour, a lower price than feared. the market. Safran gained 1.5% backed by Goldman Sachs, which added it to its list of preferred stocks. The publisher and developer of video games Ubisoft collapsed by 17.2% on the Paris Stock Exchange, falling to its lowest since April, at 36 euros The agreement announced Tuesday evening between the founding family Guillemot and the Chinese juggernaut video games and digital Tencent evaporates the speculative premium surrounding the French group.
On the other side of the Atlantic, the main equity indices regained some ground on Thursday, with a particular mention for tech and files Growth in general. The Dow Jones gained 1.40% to 31,581 points on Wednesday and the Nasdaq Composite 2.14% to 11,791 points. The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, rose 1.83% to 3,979 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. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $82.70.
To be followed as a priority on the statistical agenda this Thursday, in addition of course to the announcement on European rates at 2:15 p.m., a speech by J Powell at 3:15 p.m., as well as American crude stocks at 5:00 p.m.
KEY GRAPHIC ELEMENTS
The 6,550 points definitely qualify as resistance, and we are seeing an entry into a new framework below the 50-day moving average (in orange). The candle drawn on Tuesday 08/30, if it had been built below the lows of Monday, could have evoked the imminence of a technical rebound. This is not the case. We had confirmation of this on Wednesday 08/31 with a close exactly on the monthly low points.
This Wednesday candle, in marubozu of school, responds to that of Friday 26/08, by already being well below, marking the heart of a wave of releases. Thursday, September 1’s gap sets the tone for the start of the new school year, confirming the identified market psychology. It was filled almost immediately, paving the way for further clearances. Next guardrail on the 5,785 points. Note the hourly pressure of the 50-hour moving average (in orange).
The angle in which the 20-day moving average is about to break the 50-day moving average is particularly important. In the immediate future, however, a short reaction of protest, annoying, is envisaged. It should be noted that value by value, the upward variations on a handful of sessions can be significant, as on automotive supplier type files.
FORECAST
In view of the key graphic factors that we have mentioned, our opinion is positive on the CAC 40 index in the short term.
This bullish scenario is valid as long as the CAC 40 index quotes above the support at 6000.00 points.
Hourly data chart
Chart in daily data
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