CAC 40: Pause of intiatives before the Fed Fomc

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“Transition” session on Monday on the Paris Stock Exchange on Monday, where the flagship index, the CAC 40, contracted 0.55% at the top of the reaction, while the market remains attentive to the slightest development in the soap of the trade war waged by Washington against the rest of the world, and singularly Beijing, which Trump accuses of all evils.

This week, if these customs issues will naturally be followed, the monetary issue will be at the center of the debates in market rooms. The Fed completes this Wednesday a monetary policy meeting (FOMC). The American central bank should leave its rates unchanged, anticipates Barclays.

“We expect the May press release from the Monetary Policy Committee and Jerome Powell to recognize that certain measures of short -term inflation expectations based on the market and surveys have increased, and that household and business surveys indicate a drop in feeling and increased uncertainty about the prospects,” writes the British bank.

In the statistical chapter, investors have taken note of the “feelix”, index measuring the confidence of investors in the euro zone, which remained in negative territory at -8,1, but the rebound is strong, the score being -19.5 last month. The barometer indicator has significantly exceeded expectations, at -14.9.

The eponymous research institute brought the following insights: “A month after the massive shock that rocked investors due to American customs policy and caused a free fall in the economic data feltix, the situation is calm. The investors revise their economic analyzes, sometimes significantly.

“Investors recognize the calm observed so far in the face of American customs rights. The current situation and expectations show signs of recovery. The main victims of Trump’s customs policy are the American economy and, to some extent, Chinese and Swiss economies. However, the period of uncertainty is probably not over.”

In addition, operators learned of a surprise acceleration in April of activity in the tertiary sector in the United States. The ISM of services increased at 51.6 points last month, compared to 50.8 in March. This index was expected at 50.4 points, according to market consensus. However, the sub-index measuring the prices charged increased at 65.1 points against 60.9 points in March.

On the values ​​side, Airbus resumed 2.1% while Jefferies returned to the purchase on the title. The highest increase in CAC 40 at the fence is signed by AXA (+2.4%) while the highest drop is accused by Kering (-2.5%). The fall in prices of the barrel lousy the prices of oil and parapetrol groups. Totalnergies sold 0.70% but parapetrolrs, much more volatile than the majors, suffer. Vallourec made 4.4% and Virid abandoned 6.6%.

On the other side of the Atlantic, the main shares on shares finished the Red Monday session, like the Dow Jones (-0.24%) and the Nasdaq Composite (-0.74%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, lost 0.64% to 5,650 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 $ 1,1330. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 62.90. 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 26.47 at the last fence of the S&P500.

At the macroeconomic agenda this Tuesday, to follow the final data of the PMI services in the euro zone at 10:30 am for the month of April as well as the American trade balance at 2:30 p.m.

Key graphics elements

The opening gap, ample on Friday 02 May, showed a first shortness of breath of the catch -up movement initiated on April 08. From now on, the index is under strength of resistance, materialized, among other things by another GAP, downside this one: that of Thursday, April 03, the beginning of the vivid correction linked to the entry into force of prohibitive customs rights.

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 7810.00 points.

Hourly data graphics

Daily data graphics