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He will not have escaped the markets of the markets that it is “Fed Day” today, namely that the Federal Reserve completes a meeting of its Committee of Monetary Polic. This FOMC, except extraordinary surprise, will end in a status quo on the rates proper, but the stake is elsewhere, even though visibility falls on the American economy, at the dawn of a high intensity “trade war”.
Three very important elements will be scrutinized. The new economic projections of the Fed, especially in terms of growth and inflation, the elements of language used at a press conference, and … the famous dowry studs, this point histogram published each quarter. The mechanics are simple: the 12 voting members, under the cover of anonymity, register their feeling as to the level of the Fed Funds for the next deadlines.
The Fed will not fail to react to the last developments of the intelligent trade war launched by the tenant of the White House … even if the beige book of the Fed insisted on moderation at this stage, inflationary and salary pressures.
“Will Donald Trump continue his brutal approach or on the contrary, in the face of shielding and the first economic consequences of his decisions, will he put water in his wine? When he speaks of a transition phase, accept the prospect of a slowdown, even a recession? All these questions should be addressed during the meeting of the federal reserve”, List Emmanuel Auboyneau upstream of the FOMC.
“The message delivered by Jerome Powell will be interesting to decipher and will give the trend for the future. It should probably remain cautious and reserve all the future room for maneuver. No decision decision should be announced at this meeting.”
Do nothing, so, yes but do it well! That is to say by sending reassuring messages, showing that the institution has all the appropriate navigation tools, and that it can even navigate “in sight” if necessary!
Thomas GIUDICI, head of bond management of Auris Gestion, sums up the situation for tomorrow. “In this ambient fog, Jerome Powell and the Fed, relegated to the background, can savor this welcome respite. Between inflation figures better than expected in February but still close to 3%, the still unknown impact of customs duties on inflation and growth as well as an American economy in slowing but resilient, it is urgent to do nothing. its monetary policy meeting.
The decision for rates will be known this Wednesday at 7:00 p.m. Wednesday, with the updating of economic forecasts and plots. The press conference will follow at 7:30 p.m.
In the statistical chapter Tuesday, in addition to the rather good monthly report on American industry, it is the index of confidence Zew German that marked the minds, straightening up even more than anticipated, at 51.6 points.
“This improvement in the economic climate is probably explained by positive signals concerning the future German fiscal policy, such as the financial agreement of several billion euros for the federal budget. The prospects have notably improved for manufacturers of metals and steel, as well as for the mechanical construction sector. Finally, the sixth consecutive decrease in interest rates by the ECB is reflected in favorable funding conditions and companies, “said the president of the Zew Achim Wambach.
On the values ​​side, cyclical titles have distinguished themselves. Strong increase in CAC 40 this Tuesday, BNP Paribas which won 2.95%, followed by Société Générale (+2.5%) and Stmicroelectronics completes the podium (+2.4%). Excluding CAC 40, Groupe Bolloré lost 5.4% in the wake of its annual results, the title being penalized by the absence of announcements on the use of its important cash.
On the other side of the Atlantic, the main shares on shares finished Tuesday in the red, like the Dow Jones (-0.62%) or the Nasdaq Composite (-1.71%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, contracted 1.07% to 5,614 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 $ 1,0920. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 66.20. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.29%. As for the VIX, it was worth 21.80 at the last fence of the S & P500.
At the macroeconomic agenda this Wednesday, to follow in priority consumption prices in the euro zone at 11:00 am and the Fed decision at 7:00 p.m.
It should be noted that the east coast of the United States has passed in the summer hour. Consequently, and while waiting for mainland France in turn, Wall Street will open at 2:30 p.m., instead of 3:30 p.m. usually.
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.
Consequently, work between 7,810 and 8,000 points in the coming weeks is the graphic scenario of favorite. Scenario fully confirmed by the rupture, in growing volatility, of the 8,000 points on March 11. The RSI, an oscillator for breathtaking movement, is still far from its occurrence zone.
Under the 7,810 points, the technical situation would deteriorate somewhat, with in particular the effect of attraction of gaps formed in January, especially that of the 16, very large.
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.
The News Bulletin 247 Council
Hourly data graphics
Daily data graphics
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