(News Bulletin 247) – Concerned by the inflationary problem on both sides of the Atlantic as figures for measuring the dynamics of prices accumulate over the first two months of the year, the market, without losing foot, goes back clearly on the defensive. Especially since the yields of US Treasury bonds have just exceeded the symbolic threshold of 4%…

The European CPIs (Euro Zone, first estimates for February) will be published this morning by EuroStat, after the French components earlier in the week by INSEE and the German ones by EuroStat.

As a reminder, the inflation figures in France do not show any appeasement on the price trend front. The harmonized consumer price index in France increased by 7.2% over one year in February against 7% in January. In Germany, the rise in prices in February (+0.8%) largely missed the consensus on the rise.

Price pressures therefore continued on the other side of the Rhine last month, as in France or Spain. This resumption of inflation in the member countries suggests a similar price trend for the euro zone as a whole. It also reinforces the prospect of further tightening of interest rates by the ECB.

On the stock side, Eurofins Scientific suffered the biggest drop in the CAC 40 (-12.12% to 58 euros) after publishing disappointing annual profitability and lowering its outlook for 2023. BNP Paribas shares (-5%) were under pressure, while the Belgian State decided to sell a third of its stake in the bank.

On the other side of the Atlantic, the main equity indices closed in the red, with the notable exception of the Dow Jones (+0.02% to 32,661 points) thanks to its composition rich in banking files drawing their pin of the game in a context of tensions on the rates. Conversely, the Nasdaq Composite lost 0.66% to 11,379 points, and the S&P500 0.47% to 3,951 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 $1.0640. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $77.60.

To be followed as a priority on the macroeconomic agenda this Thursday, the various consumer price indices in the Euro Zone at 11:00 a.m., in first estimates for the month of February, and the weekly registrations for unemployment benefits across the Atlantic at 2:30 p.m.

KEY GRAPHIC ELEMENTS

The bearish engulfing sequence in powerful volumes and harami in much more discreet volumes, in the upper part of the bullish momentum movement, releases a short-term bearish potential, a potential that would only gain momentum in the event of a break in the moving average at 50 days (in orange) by its sister at 20 days (in dark blue). Note the closing close to the lows of the session on Wednesday, of course, but the absence of fear at this stage.

FORECAST

In view of the key graphic factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.

This bearish scenario is valid as long as the CAC 40 index is trading below the resistance at 7422.00 points.

The News Bulletin 247 board

CAC 40
Negative
Resistance(s):
7422.00 / 7740.00
Medium(s):
7000.00 / 6760.00 / 6420.00

Hourly data chart

Graphic made from the software Prorealtime

Chart in daily data

CAC 40: Fearless, but on the defensive (©ProRealTime.com)
Graphic made from the software Prorealtime



function creatOutbrainJs() {
const creatJs = document.createElement(“script”);
creatJs.defer = true;
creatJs.src = “https://widgets.outbrain.com/outbrain.js”;
return document.body.appendChild(creatJs);
}

window.didomiOnReady = window.didomiOnReady || [];

window.didomiOnReady.push(function(Didomi) {
console.log(“Didomi ready “);

Didomi.getObservableOnUserConsentStatusForVendor(164)
.filter(function (status) { return status !== undefined })
.subscribe(function(consentStatus) {
if (consentStatus === false || consentStatus === true) {
console.log(“Didomi consent -> exécution du script outbrain “, consentStatus);
creatOutbrainJs()
}
});

});