(News Bulletin 247) – Volatility exploded yesterday with the publication of US inflation figures, the pace of which fell much more than the consensus had predicted. As a symbol in the run-up to the last FOMC of the year (verdict tonight 8:00 p.m.). The ECB will follow suit with the outcome tomorrow of a Board of Governors. The CAC 40 gained 1.42% to 6,745 points, far from its session highs (6,823 points).
At an annualized rate, the consumer price index (largest basket) increased by 7.1% in November, against 7.7% in October. A sharp slowdown that beats the consensus. Excluding food and energy (volatile elements), prices rose by 6.0%. Something to relax the atmosphere on the eve of a Fed meeting where clues on the “terminal” rate will be gleaned, while the scenario of a 50 bp increase in Fed Funds is now almost confirmed.
The advantage is twofold for the markets, in the sense of Alexandre BARADEZ (IG France): that of the hope of a more “lenient” Fed on the one hand and that of a reduction in the risk of entering a recession deep. “Market players, who already see the end of monetary tightening and even anticipate a rate cut in 2023, are not worried about the impact of monetary tightening on the economy and anticipate a soft landing”, continues M BARADEZ .
Values ​​in Paris, sensitive to the evolution of interest rates, techno values ​​resume colors. STMicroelectronics (+3.42% to 37.75 euros) and Dassault Systèmes (+3.26% to 36.57 euros) finished at the top of the CAC 40 on Tuesday evening. Between the two is inserted the real estate Unibail-Rodamco-Westfield (+3.3%) also sensitive to the rise in yields.
On the other side of the Atlantic, the main equity indices managed to maintain some gains (meagre compared to the initial advance) on Tuesday, like the Dow Jones (+0.30% to 34,108 points), or the Nasdaq Composite (+1.01% to 11,256 points). The S&P 500, benchmark barometer of risk appetite in the eyes of fund managers, nibbling 0.73% to 4,019 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 $1.0630. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $74.90.
To be followed as a priority on the macroeconomic agenda this Wednesday, in addition to the US monetary policy decision (8:00 p.m.) and the Fed press conference (8:30 p.m.): industrial production in the Euro Zone at 11:00 a.m.
KEY GRAPHIC ELEMENTS
The prices of the flagship Parisian index are now at the heart of a tidied up between 6,550 points and 6,740 points, in which, until now, the beginnings of a chartist pattern were taking shape. This would only continue in the event of a decline in the lateral channel. Conversely, a clear overshoot, on an uncontested gap for example, would pave the way for a rapid achievement of 6,900 points. Tuesday the courts attempted an excursion, which turned into an incursion. The Fed’s decisions will serve as a revealer if necessary.
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 6898.00 points would revive the tension in the purchase. While a break of 6550.00 points would relaunch the selling pressure.
Hourly data chart
Chart in daily data
©2022 News Bulletin 247
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
