(News Bulletin 247) – Optimism continues to prevail at the start of 2023, under the sign of appetite for risk, an appetite fueled by the hope of confirmation, this Thursday, of a marked slowdown in the rise in prices on the other side of the Atlantic. The CPI (consumer price index, or CPI for English speakers) is expected, for the widest product base and at an annual rate, up 6.5% in December, against +7.1% . The confirmation or not of the beginning of a rapid descent, and therefore of an end to an inflationary “peak”, would give credit to a little “flexibility” in the monetary policy of the Federal Reserve, whose members more hawks want to remain particularly vigilant, however.
Mary Daly, the president of the San Francisco Fed, has indicated that she expects the American central bank to push its rates beyond 5% before pausing. Atlanta Fed President Raphael Bostic made similar comments, seeing the Fed come in at a terminal rate between 5% and 5.25%, down from a current range of 4.25% to 4.50%.
See you at 2:30 p.m. for an analysis of these consumer prices, while bearing in mind that “the inflation against which the Fed must fight is now mainly confined to services…but the recent publication of the ISM Services , a leading indicator, points in the direction of an upcoming slowdown in price pressure in this sector”, for Alexandre Baradez (IG France). “Indeed, the “Prices paid” component of the indicator fell in December to its lowest level since the beginning of 2021.”
The CAC 40 index, the flagship index of the Paris market, gained 0.80% to 6,924 points on Wednesday, bringing its lead since January 1 to nearly 7%. Luxury will have created a good part of the advantage, with respective increases of 2.12% and 3.64% for LVMH and Kering. Excluding the flagship index, SES-imagotag jumped 5.20% to 125.4 euros. The king of smart labels has announced the acquisition of French company In The Memory, which specializes in retail data analysis.
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 $1.0750. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around 75.00$.
To be followed as a priority on the macroeconomic agenda this Thursday, the American CPI at 2:30 p.m. at the statistical high point of this second part of the week.
KEY GRAPHIC ELEMENTS
This ability to close exactly on the weekly highs is interesting at this stage (S1), and must be confirmed by the volumes and the sector federation to consider a more lasting grip on the buying side. In the absence of such confirmations, entry into a highly volatile consolidation pattern, with an uncertain exit direction, is the preferred option. In the immediate future in any case, no divergence between price and oscillatory RSI is to be noted.
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 7036.00 points would revive the tension in the purchase. While a breakout of 6694.00 points would revive selling pressure.
Hourly data chart
Chart in daily data
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