(News Bulletin 247) – The CAC 40 index will have managed to nibbling points throughout a session that got off to a bad start, however, with an opening down sharply and with the publication at the end of the morning of worrying inflation figures in the Euro Zone . The flagship Parisian index managed to grab 0.69% at the close.
CPIs came out at +8.5% for the month of February on an annual basis, beyond expectations (+8.3%) Although the slowdown was much less severe than expected after the 8.6% in January. volatile elements (core inflation), prices rose at an annual rate of 5.6%. Enough to put pressure on the European Central Bank (ECB) in its monetary management for the coming months.
“While energy prices offered some respite for the third consecutive month, food prices continued to climb,” observes Ulrike Kastens, DWS Europe Economist. Although the European Central Bank (ECB) cannot directly influence food prices, it is precisely the latter that lead to an increase in inflation perceived by consumers. The ECB cannot ignore it. In addition, the base rate rose sharply to 5.6%, as prices for services, in particular, rose sharply. We don’t expect any real easing of the base rate this year as businesses will continue to pass on their rising costs to consumers.”
“With our forecast of an average base rate of 4.9% for the year, the ECB still has a lot to do. Even after the March meeting, expect more big rate hikes to get the inflation problem under control“.
On the values side, TotalEnergies rose 1.97% to 59.12 euros, followed by Kering (+ 1.78%) and ArcelorMittal (+ 1.7%). The biggest drop in the CAC 40 can be attributed to the liabilities of STMicroelectronics (-3.2%), which, according to several analysts, is suffering from Tesla’s announcements.
On the other side of the Atlantic, the main equity indices closed in the green thanks to a (slight) easing on the front of bond yields. The Dow Jones gained 1.05% to 33,003 points on Thursday and the Nasdaq Composite 0.73% to 11,462 points. The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.76% to 3,981 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 $1.0620. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around 78.00$.
To be followed as a priority on the macroeconomic agenda this Friday, a battery of PMI Services activity indicators (Euro Zone at 10:30 a.m.). The more followed American ISM Services will be published at 4:00 p.m.
KEY GRAPHIC ELEMENTS
The bearish engulfing pattern in powerful volumes and harami in much more discreet volumes, in the upper part of movement of momentum bullish, releases short-term downside potential, which would only gain momentum if the 50-day moving average (in orange) breaks with its 20-day counterpart (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. The fight against this moving average is tough.
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
Hourly data chart
Chart in daily data
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