CAC 40: Trump or the art of brutality

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Trump’s art of brutality is fully expressed on this first part of the week … First of all a freezing of military aid to Ukraine – the American president who has still not digested his altercation with his Ukrainian counterpart on Friday in the oval office. And with, on the other hand, the implementation of customs duties this Tuesday 25% for products imported from Canada and Mexico, with the exception of energy. Customs duties on products imported from China are doubled from 10% to 20%.

Recall that in a scene of rare verbal violence, in the world, the American president humiliated his Ukrainian counterpart, in the oval office, intimating him to sign an agreement on the exploitation of rare land, without the counterparts of guarantees of security desired by V. Zelensky. Aggress the assaulted, and have the Russian aggressor jubilant, that is in substance the attitude of the former real estate magnate, with which the markets will have to compose this week. London organized a summit of Western allies, a summit whose challenge was to show that the other kyiv allies was united, and to do this, the key was: rearmament.

Monday, the CAC 40 flirted with its historic records before falling back some little before the closure, still managing to preserve 1.09%of gain at 8,200 points, carried by La Défense: Safran won 3.12%, Dassault Systems 3.19%, Airbus 5.24%and Thalès 16%.

“The recent interactions between Ukrainian President Zelensky and Donald Trump have triggered alarms on Europe’s vulnerabilities in defense,” said independent alphavalue design office.

Excluding the flagship index, Dassault Aviation jumped 14.7% and exosens, a company specializing in detection and photodetection very exposed to defense, of 19.7%. Eutelsat took 68%, while the market expects tensions between the United States and Europe in terms of defense to benefit its Oneweb subsidiary to the detriment of Starlink, Elon Musk business.

In the statistical chapter Monday, Monday, operators learned of the PMI manufacturer in final data for February, at 47.6 points slightly above expectations thanks to a German component which pleasantly surprised at 46.5, although clearly below the 50 points.

“The latest PMI data highlights the beginnings of an improvement in the first quarter environment: new orders have indeed displayed their lowest decrease since May 2022 and production has come closer to stabilization. Thus, after almost three years of recession, it seems that the sector can return to very slight growth in the coming months, trend that should promote the rapid constitution of a government in Germany More stable in France and an agreement on customs tariffs with the United States, “said Dr. Cyrus de la Rubia, chief economist at the Commercial Bank Hamburg.

Excluding food, energy, alcohol and tobacco, inflation in the euro zone has indeed slowed down in February to +2.6% in annual rate, above the consensus at +2.7%. “The inflation of the services fell to 3.7 % in annual sliding, its lowest level for two and a half years. However, the prices of the services have increased and, in the last three months, they have progressed at a rate which would be too high for basic inflation reaching 2 %,” retain nomura economists.

“This could play in favor of those who, within the ECB, wonder how far interest rates can descend. We continue to provide rates to 1.75 % by September, that is to say slightly below our objective of neutrality. But this would require weaker news concerning IPCH. Inflation will remain at the heart of our concerns in the coming months”.

On Thursday, the ECB will complete a council of governors. The German asset management company DWS expects that “the European Central Bank (ECB) will once again lower its deposit rate of 25 base points to bring it to 2.50 % in March, thus marking its sixth consecutive decline. However, the room for maneuver for new rapid reductions seems to be limited. The opinions within the ECB are increasingly shared on the number of rate to come in the coming month, Their pace of application and the question of whether the current monetary policy is already restrictive. “

On the other side of the Atlantic, the main shares on shares finished the first session of the week in bright red, like the Dow Jones (-1.48%) but especially the composite Nasdaq (-2.64%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, contracted 1.76% to 5,849 points.

A point on the other asset classes at risk: around 8:00 am this morning on the exchange market, the single currency was treated at a level close to $ 1,0480. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 67.80. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.13%.

At the macroeconomic agenda this Tuesday, to follow the unemployment rate in the euro zone at 11:00 am. It is expected stable at 6.3% of the active population.

Key graphics elements

The tricolor flagship index is typically in the consolidation phase, between the 8,000 symbolic points and the historical summits which it has just brushed. The latter will day for the coming months an intermediate level of resistance, to which the index will attack when it has accumulated enough energy. Only a brutal break in the 7,810 points would ring the alarm. Work between 7,810 and 8,000 points in the coming weeks is the favorite graphic scenario.

FORECAST

In view of the key graphic factors that we have mentioned, our opinion is negative on the CAC 40 index in the short term.

This downward scenario is valid as long as the CAC 40 rating index below resistance at 8260.00 points.

Hourly data graphics

Daily data graphics