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At the heart of a broader congestion phase, and therefore not without some volatility, the CAC 40 managed to gain 1.52% to 7,433 points on Thursday, based on relatively reassuring data on US inflation. Statistical high point on Thursday, consumer prices nibbling 0.2% in July, in line with expectations, whether for the widest product base or the data corrected for volatile elements. Over one year, prices increased by 3.2%. Not enough to further feed the mill of the most hawkish from the Fed.
The CME tool FedWatch now assigns 89% probability to the scenario of a pause at the end of the FOMC in September.
“The dynamics of disinflation are changing in nature: it is mainly energy that brought down inflation in the first half of the year, but it is underlying inflation (housing and to a lesser extent transport ) which will fall in the second half of the year. Headline inflation could experience a period of relative stability around current levels, with the decline in underlying inflation counteracting clearly favorable ‘price at the pump’ base effects”, suggests Bastien Drut, Head of Studies and Strategy at CPR AM.
To be complete on the statistical level, concerning employment, another barometer particularly watched by the Fed, the operators will have noted the increase, higher by 17,000 compared to the consensus, in new weekly registrations for unemployment benefits.
In terms of values, luxury was in the spotlight after China’s decision to lift the ban on group travel in more than 70 countries, including the United States. Hermès and LVMH gained more than 3% while Kering appreciated 2.2% at the close Thursday evening. TotalEnergies (+1.3%) also contributed to the rise of the Parisian market, in the wake of the recent rise in oil prices.
On the other side of the Atlantic, the main equity indices, if they closed in the green, did so far from their session highs on Thursday, like the Dow Jones (+0.15 %) and the Nasdaq Composite (0.12%). The S&P500 (+0.03%) ended on a flat note.
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 $1.0995. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $82.40.
On the agenda this Friday, to follow as a priority across the Atlantic, producer prices at 2:30 p.m. and preliminary data from the consumer confidence index (U-Mich) at 4:00 p.m.
Note the closure of Tokyo on August 11, due to a public holiday (Mountain Day).
KEY GRAPHIC ELEMENTS
The exit from the congestion figure on Friday July 21 was thwarted twice, on July 26, on a wide gap, and over the whole of the past week, on a break in the short moving average. The bullish message has momentarily lost its meaning. We will monitor any formation (and confirmation at the end of the session) of a bearish gap. We witnessed the perfect repeat of the August 02 candle on Tuesday, ie a school doji with elongated shadows, a marker of nervous indecision at the heart of an enlarged pattern of consolidation.
On Thursday August 10, the tricolor index came up against the upper limit of a larger diamond, the validity of which will be tested this Friday. Any configuration in haramifor example, would be instructive.
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 7500.00 points.
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