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Yesterday Pentecost Monday, a public holiday but not a day off on the Paris Stock Exchange, the CAC 40, at a starving level of activity, gained 0.35% to 8,195 points, continuing its lateralization movement close to its recent zeniths, and this in the absence of notable statistical figures.
On the statistics side on Friday, currency traders digested the final consumer price data in April, for the Euro Zone this time, which EuroStat, the statistical office of the European Union, has just published. No deviation to report compared to the first estimates. Excluding food, energy, alcohol and tobacco, prices increased by 2.7% annually. Figures which are stable compared to March.
The day before, today’s indicators (registrations for unemployment benefits, Philly Fed, housing starts and building permits) did not contain any unpleasant surprises (in the Fed’s sense!). Investors also took note of the publication of industrial production for April in the United States, which fell by 0.3% over one month. Which “continues the series of weaker activity data and will further reinforce expectations of a reduction in interest rates from the Fed (American Federal Reserve, Editor’s note) in September,” says Capital Economics. And on the production volume front, stable, and the production capacity utilization rate.
The CME Group’s FedWatch tool now puts the probability of a federal rate cut at the end of the FOMC on September 18 at 67.6%. The tool transcribes the probabilities of changes in federal rates and American monetary policy based on the price of 30-day federal funds futures contracts.
The agenda will be sparse at the start of the week, but it will expand over the course of the week with the speeches of several members of the American Federal Reserve. These interventions will give some indications to investors looking for signals on the future intentions of the Fed regarding its monetary policy. On this subject, the American institution will publish on Wednesday its report of its last monetary policy meeting: the famous Minutes.
On the values side, at the top of the CAC 40 this Monday evening, we find Teleperformance which gained 3%, followed by Société Générale (+2.3%) and Safran (+1.9%). Excluding the flagship index, Clariane rebounded by 22.7% after gaining 10% on Friday. The former Korian announced on Friday the terms of its capital increase operations, confirming the upcoming arrival of the HLD Europe Group as a new reference shareholder, alongside Crédit Agricole Assurances.
On the other side of the Atlantic, the main equity indices ended Monday’s session in mixed order, with the Dow Jones contracting 0.49% to 39,806 points, and the Nasdaq Composite managing to gain 0.65 % at 16,794 points. The S&P500, the benchmark barometer of risk appetite in the eyes of fund managers, ended on a stable note at 308 points above the symbolic threshold of 5,000 points. NVidia, star of the Shepherd of the Markets, will publish after-hours.
An update on other risky asset classes: around 8 a.m. this morning on the foreign exchange market, the single currency was trading at a level close to $1.0860. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $78.80.
On the agenda this Tuesday, to follow in priority a speech by C Lagarde, President of the ECB, at the Frankfurt School of Finance at 10:00 a.m., and the monthly balance of the trade balance in the Euro Zone at 11:00 a.m.
KEY GRAPHIC ELEMENTS
The resistance level of 8,120 points gave way on Thursday 09/05 in insignificant volumes due to the absence of numerous operators. However, in the very short term, the new working framework is between these 8,120 points, and the absolute peaks close to 8,220 points, i.e. a thin band of around a hundred points. All taking place at the heart of an ascending channel, the lower limit of which (support) can be tested quickly.
FORECAST
Considering the key graphical 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 below resistance at 8220.00 points.
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