(News Bulletin 247) – Optimism was measured on Monday, in the absence of sharp statistical benchmarks, and on the eve of the publication of new US inflation data, the CAC 40 managing to gain 1.11% to 7,208 points, in a level of activity – volumes – timid and in retreat. The CPI (consumer price indices) in the United States will be published at 2:30 p.m. The publication of the CPI is expected to slow down to +6.2% at an annualized rate.
William Gerlach, Regional Manager of iBanFirst warns, and warns against a missed target (the market consensus). “The January CPI could turn out to be worse than expected”, anticipates the leader, who continues: “In this case, we could see an increase in volatility in bonds, equities and currencies. This is a serious risk to be taken into account.”
“If the inflation problem persists, which is quite possible, it is likely that the final policy rate in the United States will be higher than the current consensus of 5%. The market is starting to talk about a rate of 6%. A minority of analysts, referring to Taylor’s rule, even predict that the Fed will have no choice but to raise its benchmark interest rate beyond 8%. is that the market is certainly too complacent about falling inflation (and far too confident about the possibility of lower interest rates in the United States this year).”
Central bankers overwhelmingly reaffirm that Fed and ECB monetary tightening is not over. last week, when Lagarde and Powell had seemed less harsh,” said Xavier Chapard of La Banque Postale Asset Management.
Investors clung yesterday to new economic forecasts from the European Commission. Brussels is more optimistic for growth, expecting gross domestic product (GDP) growth in the euro zone of 0.9% this year against 0.3% for its previous forecast in November. In terms of inflation, the Commission anticipates an average rate of 5.6% in October, and 2.5% in 2024, against 6.1% and 2.6% respectively, in November.
On the values ​​side, L’Oréal (+3.7%) finished at the top of the CAC 40, regaining strength after a decline (-0.8%) on Friday following the publication of its annual results. Vinci followed (+2.95%) with Barclays in support, the British bank having raised its target price to 120 euros, against 113 euros, while maintaining its outperformance advice.
On the other side of the Atlantic, the main equity indices ended the first session of the week in green territory, like the Dow Jones (+1.11% to 34,245 points) and the Nasdaq Composite ( +1.48% to 11,891 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 1.14% to 4,137 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 $1.0740. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $80.00.
To be followed as a priority on the macroeconomic agenda this Tuesday, the various consumer price indices in the United States, for the month of January, at 2:30 p.m.
KEY GRAPHIC ELEMENTS
Despite the alert that sounded on Wednesday 08/02, the index “holds” for the time being, above 7,000 symbolic points, which serves as a basis for intermediate technical support. Above this symbolic threshold, a consolidation can take place without jeopardizing the short-term bullish bias. Below this, another serious safeguard is that of the 50-day moving average (in orange), bullish since the beginning of November 2022. There is therefore a significant reflux margin, which even if visited, would not come back questioning the bullish bias at this point.
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 7422.00 points would revive the tension in the purchase. While a break of 7000.00 points would relaunch the selling pressure.
The News Bulletin 247 board
Hourly data chart
Chart in daily data
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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.
