CAC 40: At 2:30 p.m., a federal report on employment to watch

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Will the NFP (Non Farm Payrolls) report on American private employment further encourage the welcome downward movement on the American 10-year bond? This is roughly the point of the session. Meet at 2:30 p.m. to discover the main lessons from the federal report, for which the financial community expects a stabilization of the increase in wages (+0.3%) and the unemployment rate (3.8%), and a reduction in number of positions created in the private sector (excluding agriculture), at 238,000? Earlier in the week, the ADP firm’s survey and weekly registrations for unemployment benefits showed the persistence of tensions on employment, tensions mechanically generating inflation… The Fed, ultra dependent on data, will have material on this for reflection.

As a reminder, the Federal Reserve completed an FOMC on Wednesday which unsurprisingly ended with a status quo monetary. The Washington Monetary Institution has clarified that it is not considering lowering rates until inflation falls more significantly. For the June FOMC, we should once again expect a status quo. The CME Group’s FedWatch tool puts this scenario at more than 91% probability.

In terms of statistics, investors took note of the PMI barometers of industrial activity in the Euro Zone, without much difference compared to the first estimates for April, at 45.7. This barometer has remained below the 50 point mark since August 2022. As for weekly registrations for unemployment benefits across the Atlantic, they amounted to 208,000 new units, still very close to the floor area of ​​200,000.

On the values ​​side, the flagship Parisian index will have been weighed down mainly by TotalEnergies (-2.54%) against a backdrop of decline in crude oil prices, and by Stellantis (-4.34%), in the wake of the fall of more than 10% Tuesday. Conversely, Teleperformance jumped 13.85%, after revealing growth above expectations in the first quarter.

On the other side of the Atlantic, the main equity indices regained ground, particularly on the technological side of the stock, with the Dow Jones gaining 0.85% and the Nasdaq Composite 1.51%. The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, gained 0.91% to 64 points above the psychological threshold of 5,000 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 $1.0730. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $78.90.

On the agenda this Friday, to follow in priority the American ISM services at 4:00 p.m. but above all, as a highlight, the NFP (Non Farm Payrolls) report on American private employment.

KEY GRAPHIC ELEMENTS

Now is the time to take a breather from the lessons. The CAC index has traced, in contact with the upper Bollinger band, two candles where the low points, the opening level and the closing level merge. And this before starting a slow decline towards the lower part of an ascending channel (in black) on the daily chart. The session of Tuesday April 2, by the volumes, the length of the red body of the corresponding candle, reinforced the 8,220 points as a difficult level to cross.

Then a major technical event occurred, namely the breaking of the gap, the highly symbolic threshold of 8,000 points. The latter, however, does not appear as a scar on the index in the sense that it was filled in from the following session. It is now the level of 8,120 points which plays its role as graphic resistance.

We are in the heart of a deep, legitimate breath on the flagship tricolor index.

Two bearish targets present themselves: the bullish gap of February 22, the lower limit of which is worth 7,821 points, then the intermediate support at 7,700 points. Until then, the occasional formation of sharp downward acceleration in prices cannot be ruled out, before remobilization of the buying camp.

Neutral opinion proposed on the scale of the upcoming session, with regard to the rebalancing carried out at Wall Streer.

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 8120.00 points would revive the buying tension. While a break of 7821.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart