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The CAC 40 experienced a volatile session yesterday, in the wake of the ECB press conference, closing the Board of Governors. Unsurprisingly, the powerful European financial institution raised its key rates by 25 bps, adopting a particularly hawkish tone, auguring a continuation of a firm monetary policy to fight against the persistence of inflation.
“Mrs. Lagarde was very explicit on this point. [signaler un nouveau resserrement]and said it was “very likely” that rates would be raised again in July, given the outlook for high inflation,” said Francesco Pesole, Economist at ING.
“The statement surprised markets, and short-term eurozone yields – which reflect shifts in policy rate expectations – rose after the press conference (2-year yields: +8 basis points in Germany, +10 basis points in France, +10 basis points in Italy).”
This meeting of the ECB follows that, the day before, of the FOMC of the Fed, which decided to leave the remuneration of its Fed Funds unchanged, while maintaining a particularly firm tone.
Christian Scherrmann, US DWS Economist, notes that “Fed Chairman Jerome Powell reiterated participants’ desire to continue raising rates, while stressing that it was ‘prudent’ to wait this time – Ultimately, the dot plot is not an action plan and decisions will be made from meeting to meeting, he added. had no discussion on how the two planned hikes will be carried out, Mr. Powell reaffirmed his “meeting by meeting” approach.
In terms of statistics, which took a back seat despite a busy schedule, operators became aware of retail sales, in line with data expectations core, the Philadelphia Fed’s manufacturing index, in the target at -13.7, the New York Fed’s manufacturing index which returns in a welcome way and into positive territory, and weekly jobless claims, at 262,000 new units, the highest since May 11. Slight disappointment on the volume of industrial production (-0.2% monthly), but not on the production capacity utilization rate
On the securities side, a few emblematic listing files amplified the decline, such as BNP-Paribas (-2.14%), Vallourec (-2.65%), Alstom (-2.72%) or Rexel ( -2.73%). Ipsos posted a 3.7% increase, the market appreciating the investor day held on Wednesday during which the polls and studies group unveiled its ambitions in generative AI. In small caps, Balyo jumped more than 50% after announcing that it would be the subject of a friendly takeover bid by Japanese giant Softbank.
On the other side of the Atlantic, the main equity indices resumed their march forward, like the Dow Jones on Thursday (+1.26% to 34,408 points) or the Nasdaq Composite (+1.15 % at 13,782 points). The S&P 500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 1.22% to 4,425 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 $1.0950. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $70.60.
On the macroeconomic agenda this Friday, to follow as a priority the consumer price indices in the Euro Zone, in final data for the month of May at 11:00 a.m. and across the Atlantic, the preliminary data of the consumer confidence index (U -Mich) at 4 p.m. The full statistical calendar is available here.
KEY GRAPHIC ELEMENTS
While the attraction effect of the gap of May 24 (its remainder, in reality) was felt, the CAC came to fail almost exactly on its lower limit on June 14 before falling back before the close. Symmetrically inverse session the next day, showing all the versatility of the market.
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 7290.00 points would revive the tension in the purchase. While a break of 7088.00 points would relaunch the selling pressure.
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