(News Bulletin 247) – The hardening of tone of J. Powell, President of the Fed, before the Senate Banking Commission on Tuesday, caused tension in trading rooms, not being able to rule out the idea of ​​​​a Fed curve Funds higher for longer. This Wednesday, J. Powell continues his traditional biannual hearing, before the elected representatives of the House of Representatives.

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The central banker hardened his tone, seeming to indicate to the market that he should potentially wait for larger rate hikes than he had anticipated so far. Potentially stronger rises, and faster than expected by a large fringe of the market. A tone that will have to be put into perspective with the various publications on employment this week (ADP and JOLTS on Wednesday, registrations for unemployment benefits on Thursday and NFP on Friday). Employment in the private sector whose chronic tensions are themselves generating inflation…

It is the whole question of the anticipation of the terminal rate that will play out particularly this week. Thomas Giudici, head of bond management at Auris Gestion, notes “an upward revision of expectations on the terminal rate of central banks”.

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“Equity markets and credit spreads seem for the moment, and quite surprisingly, immune to these rate movements. rates operated by central bankers. The publication of the ISM Services above expectations in the United States is the perfect example. In addition, the earnings publication season has shown a certain resilience of companies. However, we generally tends to say that rates are rarely wrong…”

On the value side, defensive actions on the CAC 40 slowed down the decline in the index. Danone gained 1.1%, Thales took 0.8% and Sanofi 0.9%. The pharmaceutical group has also announced that the Food and Drug Administration, the American health authority, has accepted the application for an indication for Dupixent, the French group’s flagship drug, for the treatment of chronic spontaneous urticaria in adults. and the teenager from 12 years old. Genomic Vision jumped 68% after announcing the launch of artificial intelligence-based software, which aims to automate the detection and quantification of fluorescent signals on combed DNA molecules, i.e. deposited on slides to be visualized and analyzed.

On the other side of the Atlantic, the main equity indices ended Tuesday’s session in the red, like the Dow Jones (-1.72% to 32,856 points) and the Nasdaq Composite (-1 .25% at 11,530 points). The S&P500, benchmark barometer of risk appetite in the eyes of fund managers, lost 1.53% to 3,986 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 $1.0540. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $77.40.

To follow as a priority on the macroeconomic agenda this Wednesday, the revised GDP data in the Euro Zone at 11:00 a.m., the results of the ADP firm’s survey on American employment at 2:15 p.m., the second part of the hearing of J Powell at 4:00 p.m., as are new job openings (JOLTS).


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. The fight against this moving average is fierce, and violent oscillations chop this flattening trend line. The option of broader consolidation takes shape at this stage.


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
7422.00 / 7740.00
7000.00 / 6760.00 / 6420.00

Hourly data chart

Chart in daily data

CAC 40: J Powell toughens his tone in front of Parliamentarians (© ProRealTime.com)

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