CAC 40: Barely invested, Trump announces shock measures

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In the absence of a benchmark from Wall Street, which remained closed due to a public holiday, the Parisian market managed to gain a few points on Monday (+0.31% for the CAC40), buoyed by the hope of a clarification on customs duties.

On Monday, the Wall Street Journal reported that Donald Trump intended to issue a memo ordering federal agencies to investigate trade deficits and unfair trade practices. But, according to the American daily, this document does not provide for the establishment of customs duties from its first day in the White House.

However, the 47th President of the United States, who took the oath yesterday on the occasion of his inauguration ceremony, remained very firm on the subject, announcing to impose surcharges of 25% on imports from of Canada and Mexico starting at the beginning of next month.

“The inauguration of Donald Trump, champion of punitive customs duties, tax cuts and deregulation, heralds a new era for the global economy,” says César Perez Ruiz, Head of Investments and CIO at Pictet Wealth Management .

The European Union is “ready to defend its economic interests” if necessary, assured Monday in Brussels the European Commissioner for the Economy Valdis Dombrovskis, questioned about Donald Trump’s offensive on customs duties.

Deserted yesterday, the agenda will become denser from this Tuesday, with the closely followed German ZEW confidence index in the Euro Zone’s leading economywhich has been showing chronic signs of difficulty for several months, in particular due to a slowdown in its structural strong point, industry.

In terms of values, variations on the CAC 40 were fairly contained. Société Générale recorded the largest increase in the Parisian index, with an increase of 2.5%, while Engie returned 1.7%, the most pronounced decline. Outside the CAC 40, Poxel jumped 15.1% as sales of its type 2 diabetes treatment topped 5 billion yen in Japan, pushing its royalty rate to 10% on additional sales .

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 $1.0380. The barrel of WTI, one of the barometers of the appetite for risk on the financial markets, was trading around $76.40.

On the macroeconomic agenda this Tuesday, follow the German ZEW at 11:00 a.m.

KEY GRAPHIC ELEMENTS

We witnessed a major technical and graphical event on Thursday January 16 with the crossing of the gap and then extension during the session of the pivot threshold of 7,500 points, which regains its support attributes. The current working base therefore becomes a band between 7,500 and 7,690 points, within which a certain form of volatility is far from being excluded.

This crossing was immediately followed by a new gap (less wide) and a bullish extension during the session, with the participation of many sectors, marking the affirmation of the buying camp.

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 7810.00 points would revive the buying tension. While a break of 7690.00 points would restart the selling pressure.

Hourly graph

Daily Data Chart