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Resisting OPEC+’s surprise decision to cut production, causing a jump in WTI prices, the Paris market managed to consolidate its recent advance, built on a confirmation of a slowdown in the rise in share prices. across the Atlantic.
Across the Atlantic, PCE prices (personal consumption expenditures), excluding food and energy, increased “only” by 0.3% in February, against a month of January at +0.6%. The consensus certainly foreshadowed a slowdown in the rise in prices, but less significant (+0.4%). Enough to ease the pressure on the Fed when it had a lot to do in its last weeks to put out the beginning of a fire caused by the bankruptcy of the Silicon Valley Bank. The justification for a slowdown in its own pace of rate hikes is mechanically gaining credence, although this trend towards price deceleration must naturally be sustained over time. In any case, this PCE figure is all the more “impactful” as it is the measure favored by the Fed in its assessment of inflation.
Earlier in the day on Friday, operators took note of the slowdown in the rise in consumer prices across the euro zone following the announcement of a similar trend in Germany and Spain. The annual inflation rate in the euro zone fell in March for the fifth consecutive month, thanks to the lull in energy prices. It stands at 6.9% over one year, after 8.5% in February, according to Eurostat. Note, however, a rise in core inflation (which excludes food and energy prices) to 5.7%, which could lead the ECB to raise its rates further.
“After the turbulence of mid-March linked to bank failures and fears of spreading to the entire financial system, investors regained their senses during the last days of the quarter”, summarizes Thomas Giudici, head of fixed income management at Auris Gestion, which notes that “in Europe, the Credit Suisse case seems idiosyncratic and the contagion, for a time mentioned, at Deutsche Bank would in reality be due to a speculative operation of barely 5 million euros on a CDS backed by the subordinated debt of the German bank…”
“To get going, financial markets have revived the topic of disinflation on the back of rather positive figures, at least in the United States.”
In terms of statistics on Monday, there is little to eat except for the ISM manufacturing index which came out at 46.3, contracting more sharply than the analysts’ consensus had predicted.
In terms of values, it is naturally the (para)oil files that have done well, like Vallourec (+2.80% to 11.94 euros), Technip Energies (+4.60% to 20, 56 euros), TotalEnergies (+5.89% to 57.56 euros) and Schlumberger (+6.18% to 48.04 euros).
On the other side of the Atlantic, the main equity indices ended Monday’s session in scattered order, like the Dow Jones (+0.98% to 33,601 points) and the Nasdaq Composite (-0 .27% to 12,189 points). The S&P500, the reference barometer of risk appetite in the eyes of fund managers, eroded 0.37% to 4,124 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 $1.0890. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $80.70.
To follow as a priority on the macroeconomic agenda this Tuesday, the new job offers (JOLTS) across the Atlantic at 4:00 p.m.
KEY GRAPHIC ELEMENTS
Symbolically, the CAC quickly erased the remainder of the March 10 gap during Thursday’s session, retracing all the losses suffered since the start of the banking crisis. A quick drop below 7,225 points would herald a second episode of correction, while staying above would mean engaging in a consolidation phase below the highs.
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.
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