(News Bulletin 247) – The 10-year papers (yields of US government bonds LT) suffered a new blow of heat yesterday by coming to flirt with 2% (1.995) in the wake of the much awaited publication of the figures of US inflation.
The highly anticipated consumer price indices came out markedly higher, beyond expectations, raising fears of a faster and stronger tightening of the Fed. Excluding food and energy (elements considered volatile), prices rose monthly by 0.6% in December, against a consensus of +0.5%. Already in November, these prices rose by 0.6%. At an annualized rate, prices rose by 6%, unheard of since August 1982. Including energy and food, annual inflation is 7.5%.
What relaunch the scenario of a “double” increase in federal rates next month, namely a rise of 50 bps at once. At the risk of weighing heavily on growth records. Vincent Boy, market analyst at IG France, warned us earlier this week: “A higher-than-expected reading could lead to further shocks in the market, as it could imply an even faster tightening of US monetary policy, especially after the NFPs last week, which came out in strong acceleration.”
Unsurprisingly, it was the growth files, sensitive by nature to tensions on the bond markets, which suffered significant losses. Let us mention in Paris, in the luxury and technology sectors, Wordline (-2.44% to 43.26 euros), Kering (-2.51% to 628.8 euros), Christian Dior (-3.35% to 663.50 euros), or even Hermès (-3.60% to 1,246 euros). Note that L’Oreal (-1.99%) did not appeal to investors despite an increase of nearly 30% in its net income group share. Find here a complete point on the main publications of companies Thursday.
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 $1.1400. The barrel of WTI, one of the barometers of risk appetite in the financial markets, was trading around $90.10.
To follow as a priority, on the agenda this Friday, the consumer confidence index (U-Mich) in preliminary data.
KEY GRAPHIC ELEMENTS
An oblique line of support gave way on Monday under the sectorally federated assaults of the selling camp, in a very high level of participation. This release of selling energy at this stage, in a single session (24/01), constitutes a major technical fact which characterizes the hypersensitivity of a market which is increasingly and continuously questioning the levels of valuation of the shares. . The entry into the bear market is not formally characterized, but the situation calls for the greatest vigilance under this slant. She was reinstated at the very end of the week. We put her under close surveillance.
In the immediate future, plotting a wedge in hourly data is not very engaging. The three-color flagship index came out on Thursday, from below, in accelerating volumes, before starting to rise again.
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 7120.00 points would revive the tension in the purchase. While a break of 6884.00 points would relaunch the selling pressure.
Hourly data chart
Chart in daily data
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