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The flagship Parisian index, the CAC 40, almost stood still yesterday, aligning itself with Wall Street, the initiatives remaining limited to the approach of major monetary maturities. Tensions in the job market in the United States, Saudi Arabia’s decision to cut production next month by 1 million barrels per day, and last night’s decision by the Bank of Australia to give a new tightening of the monetary screw weighs… Just like the remarks made by Christine Lagarde, President of the ECB. The index climbed 0.11% to 7,209 points.
According to comments reported by the Reuters agency, the central banker felt that she currently saw no “tangible proof” that underlying inflation (excluding energy and food prices) had reached “a peak”. Pricing pressures also remain “high”, she added, speaking at a hearing before MEPs. Clearly firm remarks, which set the tone before the Board of Governors in mid-June.
Moreover, the market is holding up against a background of speculation around public support for the Chinese real estate sector. “The Chinese government would work on a new plan to support its real estate sector in order to boost economic growth,” says Thomas Giudici, head of bond management at Auris Gestion. “These measures would include the reduction in certain districts of down payments when buying, the reduction of commissions on transactions or even the relaxation of restrictions for residential purchases. While these elements are undeniably good news, the path is still long for the Chinese indices after the rebound started.”
In terms of statistics, few things to put in their mouths yesterday. As a reminder on Monday, operators took note of “PMI” activity indicators for services, in final data for May, a little less optimistic than in the first estimate. This PMI (for Purchasing Managers Index) comes out at 55.1 for the whole of the Euro Zone and at 57.2 for Germany. Across the Atlantic, the ISM Services disappointed, plunging towards 50 points (at 50.3). Remember that below the threshold of 50 points, by construction, the score evokes a contraction of the sector considered.
“The weakness in the ISM services report stood in stark contrast to other services sector numbers, raising more questions than answers about the strength of the U.S. economy ahead of next week’s Fed meeting,” notes Michael. Hewson of CMC Markets. The US Federal Reserve (Fed) will meet on June 13 and 14, just before the European Central Bank on June 15. Enough to give knots to the brain of the Fed which must also deal with persistent tensions on the employment front.
On the stock side, Publicis finished at the top of the CAC 40 thanks to an increase of 3.46% at the close, to 72.34 euros, the day after the acquisition of Corra, a leader in e-commerce recognized by Adobe. as one of the best trading companies in North America.
On the other side of the Atlantic, the main equity indices ended at levels very close to equilibrium, as traders struggled to form an opinion on the next monetary maturities, due to dissonant signals.
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 $1.0680. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $71.30.
On the macroeconomic agenda this Wednesday, to follow in priority the French trade balance at 8:45 a.m. and the stocks of American crude at 4:30 p.m. Already published, German industrial production for the month of April was very clearly disappointed, completely missing expectations. After the disappointing factory orders published earlier in the week, it is the manufacturing sector of the Eurozone’s largest economy as a whole that is causing concern.
KEY GRAPHIC ELEMENTS
Here are the technical elements that we presented on Friday before the opening:
“The intermediate bearish target that we identify, 7,088 points, has been reached. under close surveillance the volumes on this reaction, to measure the purely technical aspect.”
These volumes, without being thick, were significantly higher than those observed the day before. Meanwhile, intra-day gains were plentiful. Finally, the previous day’s session resulted graphically in a candle with a red body without a shadow.
Under these conditions, the current working band is between 7,088 points and the bearish gap of May 24, whose upper limit is worth 7,378 points.
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 7378.00 points would revive the tension in the purchase. While a break of 7088.00 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.
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