CAC 40: the VIX at the bottom before the price cleaver

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The CAC 40 increased by 0.56% to 7,766 points on Tuesday, in a market which remains particularly attentive to the slightest development on the exhausting soap opera of the trade war that Washington led against the rest of the world. Donald Trump was inflexible on the entry into force of customs surcharges, scheduled for August 1.

On Monday, the Trump administration sent its letters to 14 countries, expressing the customs surcharge it intends to impose on imports of its business partners on August 1. The rate reaches 36% for Thailand and Cambodia, 25% for Japan and South Korea.

The European Union is not currently concerned by these letters. “During the night, Politico reported that, although a trade agreement between the United States and the European Union was not finalized, the United States had proposed to the European Union a customs duties of 10%, accompanied by certain conditions,” notes Deutsche Bank. The Reuters agency, for its part, reports that the European Union could benefit from exemptions on certain sectors on universal customs duties of 10%, citing sources due to the file.

“The rebounds of the trade war – threatens against the BRICS and agreements in view of the expiration of the expiration of the” reciprocal “surcharge – constitute a background noise on the stock market. But that ultimately exercises only a low influence on the evolution of the prices. Investors consider, on the right or right, that the worst is certainly behind,” considers Christopher Dembik, advisor in investment strategy.

In the statistical chapter, note the publication this Tuesday of a German trade surplus significantly higher than expectations for May, at 18.4 billion dollars. The NFIB index of small American companies, for its part, came to 98.6 fully in the target.

On the values ​​side, Capegmini resumed 4.30% after losing 5.6% the day before, the market coldly welcoming the acquisition of the American WNS for $ 3.3 billion out of debt. Pernod Ricard won 3.2% and Rémy Cointreau 4.2%, the two titles benefiting from an hope of an agreement between the European Union and the United States which would avoid groups of European spirits to pay significant customs surcharge.

On the other side of the Atlantic, the main equity index ended the Tuesday session in dispersed order, like the Dow Jones (-0.37%) and the Nasdaq Composite (+0.03%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, ended in very slight contraction, from 0.07% to 6,225 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 $ 1,1720. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 67.30. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.41%. As for the Vix, it was worth 16.80 at the last fence of the S&P500.

At the macroeconomic agenda this Wednesday, to follow the stocks of crude across the Atlantic at 4:30 p.m. and the Fed minutes at 8:00 p.m.

Key graphics elements

The gradual cap under the 7,900 points has suddenly turned into intense volatility. In one session Friday, May 23, the Parisian flagship index broke the Dynamics of the spring rally by breaking the mobile average at 20 days (in dark blue), the difference compared to the mobile average at 50 days (in orange) has taken up strongly.

The 7,900 points are reinforced in their status of graphic resistance, even though the dynamics of the relative force index invite caution. Indeed the RSI (Relative Strenght Index) Adopt a persistent lowering bias since May 13. The tricolor flagship index is now in a glaring situation of incapacity for creations of new heights.

First alert Thursday, June 12 with a metal gap in session. Second the next day with a new gap, filled in the session too. The short -term configuration is gradually weakened.

The intermediate support of the 7,500 points nevertheless allowed the flagship index to find oxygen at the end of the week 26. It is already back on an intermediate resistance to 7,700 points.

FORECAST

In view of the key graphic 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 a crossing of the 7810.00 points would revive the tension to the purchase. While a break in the 7605.00 points would relaunch the selling pressure.

Hourly data graphics

Daily data graphics