CAC 40: ZEW and CPI, latest major statistics before monetary meetings

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Only a few months left before the monetary tap gradually loosens! This is essentially what the market is repeating, which brought the CAC 40 to within a hair of its historic records yesterday (+0.33% to 7,551 points). This week, operators will naturally have their eyes on the ECB and the Fed who will complete their last monetary meeting of the year. If a status quo on rates is widely expected, currency traders will be attentive to the tone used, more or less muscular, more or less restrictive, to try to guess when the first rate cuts could be considered.

The Fed concludes its FOMC tomorrow and the ECB its Governing Council on Thursday.

“Everyone would like them to give indications on the direction of monetary policy in 2024. It’s too early,” according to Christopher Dembik, investment strategy advisor at Pictet AM. “In the best case scenario, they should welcome the drop in inflation which makes it possible to envisage a possible pivot next year. We will therefore have to be patient to know when the first rate cuts will take place and above all how extensive will the monetary easing process be?

No macroeconomic figures came to fuel the debates on Monday, and operators were able to digest the latest figures published on Friday on employment. The NFP, a priori worrying, must be put into perspective because certain data have been restated.

“In detail, job creations came out slightly above expectations (199k against 185k) and increased compared to the previous month (150k). This movement can be explained by the reintegration of strikers into the automobile sector, whereas they had penalized the previous report.” observes Thomas Giudici, head of bond management at Auris Gestion. “Adjusted for these movements, job creations have decelerated over the last 2 months. If this confirms the decline in tensions on the labor market, these data also confirm the resilience of the American economy with companies which, in together, still do not lay off workers.”

On the values ​​side, Publicis recorded the largest increase in the CAC 40 with an increase of 2.6%, while Alstom finished bottom of the flagship Parisian index (-2.95%). Note the progress of the Lyon biotech MaaT Pharma (+6.5%), which announced positive results in acute graft-versus-host disease.

On the other side of the Atlantic, the main equity indices ended the first session of the week in positive territory, like the Dow Jones (+0.43%) and the Nasdaq Composite (+0.20 %). The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.39% to 4,622 points.

An update on other risky asset classes: around 8:00 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0780. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $71.90.

On the agenda this Tuesday, to follow in priority the ZEW index of confidence in the German economy at 10:00 a.m. and the consumer price indices across the Atlantic at 2:30 p.m.

KEY GRAPHIC ELEMENTS

The flagship Parisian index, now close to its zeniths, needs to breathe. The Relative Strength Index (RSI) is now in the overbought zone, and the slope of the 20-day moving average (dark blue) is exceptionally high. A first lateral zone of consolidation between 7,406/7,400 and 7,500 points is identified.

FORECAST

Considering the key graphical 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 crossing 7585.00 points would revive the buying tension. While a break of 7406.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart