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Pending the monthly federal report on US employment (NFP at 2:30 p.m. this Friday), the CAC 40 index ended Thursday’s session in the red (-0.65% to 7,316 points), precipitating the monthly balance sheet to -2.42% for the month of August.
No “good surprise” concerning inflation, on both sides of the Atlantic. On this side of the ocean, it stood at 5.3% in August, stable compared to July. But economists expected a lower rate, at 5.1%. On the other side of the ocean, with July PCE price release up 0.2%, in line with target. Not enough to make the Treasuries 10 years, which now gravitate wisely towards 4.11%, pending the federal report on US employment.
Will the NFP confirm a drop in tensions on the job market, interview this week with the JOLTS (opening of positions) and the survey of the firm in human resources ADP? What about the expectations regarding this NFP report (for No Farm Payrolls) ?First of all, a stabilization of the unemployment rate at 3.5% of the active population; a moderation in the increase in average hourly wages, to +0.2% thereafter; and finally, job creations in the private sector excluding agriculture, at 169,000, against 187,000 in July. Verdict at 2:30 p.m.
“The strength of the job market also maintains tension on wages. The inflationary trajectory is therefore favorable but the fight is not won for all that”, summarizes Emmanuel Auboyneau, Managing Partner AMPLEGEST. “It requires an ever-restrictive monetary policy for many more months. The situation is comparable in Europe with a real downturn in prices but a level of inflation still too high in relation to the required criteria.”
On the values ​​side, Pernod-Ricard suffered a lot on the stock market, dropping 6.74% to 181.2 euros, the spirits group arousing disappointment on its growth on the American continent. Drawn into this wake, Remy Cointreau was also poorly oriented (-3.08%).
On the other side of the Atlantic, the main indices ended Thursday’s session far from their respective session highs, and in scattered order, with the Dow Jones losing 0.48% to 34,721 points and the Nasdaq Composite reaching to preserve in extremis 0.11% at 14,034 points. Balanced in its composition, the S&P500, the reference barometer of risk appetite in the eyes of fund managers, contracted by 0.16% to 4,507 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 $1.0840. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $83.50.
On the agenda this Friday, to follow in priority the NFP (Non Farm Payrolls) report on US private employment at 2:30 p.m. and the manufacturing ISM at 4:00 p.m. In the meantime, published overnight, a Chinese industrial activity indicator (PMI Caixin) rose back above the 50 point mark, creating a pleasant surprise.
KEY GRAPHIC ELEMENTS
From August 10 to 18, the flagship tricolor index melted from one terminal to the other of the vast flattened rhombus (diamond) which has concentrated its nervous oscillations since May 24, breaking the line of neckline of a bearish chart pattern at 7,250 points. A continuation of the oscillations within the diamond is envisaged. Any exit from the latter will give a direction provided that volumes, and a sectoral federation, are there…
Signs of fatigue within this diamond are already noticeable. The bearish engulfing August 24, at the midline of the diamond, is one. The test of the upper limit of the diamond on Thursday, and the final structure of the weekly candle, Friday after the NFP, will be decisive. Watch out for the formation of a potential combination of three black crow candles this Friday.
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.
The News Bulletin 247 board
Hourly data chart
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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.
