CAC 40: New customs threats, the EU delay

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Yesterday Monday, July 14, National Day, the Paris Stock Exchange remained open and faced with Trump’s new customs threats, the CAC 40 bent from 0.27% to 7,808 points, however at the right distance from low session points (7,764 points).

The tenant of the White House now brandishes customs duties in the amount of 30% on imports from the member countries of the European Union. In the meantime, negotiations continue, but with additional pressure.

“We believe that the Trump administration uses this last climbing customs to maximize its negotiation power and that it will eventually defuse the situation, especially if the volatility of the bond markets and scholarship holders increases again,” said UBS.

For its part, the European Union has, for the time being, has timed as to potential response measures. The president of the European Commission, Ursula von der Leyen, said that Europe still intended to favor “a negotiated solution”.

“Our basic hypothesis remains that the two parties will probably reach an agreement before August 1, or that the administration will repel the deadline again while negotiations continue,” judges UBS.

“However, the apparently maximalist and aggressive requirements of the American president – in particular ‘full and open access to the market in the United States, without any customs rights’ – make it difficult to forecast the response of the European Union. There is now a significant risk of climbing commercial tensions between Europe and the United States, which would be harmful for both economies,” said the Swiss bank.

No major macroeconomic statistical figure has come to animate this session, already marked by the absence of many operators for the national holiday. The agenda will be densified this Tuesday with consumer prices across the Atlantic. In annual rate, prices are expected up 2.6%, compared to 2.4% last month.

On the values side, files exposed to the customs theme, because highly exporter to the United States, were penalized, like LVMH (-1.67%), Valeo (-1.69%), Christian Dior (-1.78%), Forvia (-2.93%) or Remy Cointreau (-3.35%).

On the other side of the Atlantic, the main shares on shares grabbed a few points on Monday, like the Dow Jones (+0.20%) or the Nasdaq Composite (+0.27%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, nibbled 0.14% to 6,268 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 $ 1,1680. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 66.60. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.43%. As for the Vix, it was worth 17.20 at the last fence of the S&P500.

At the macroeconomic agenda this Tuesday, to follow the ZEW index of trust in the German economy at 11:00 am as well as the consumer price dynamics across the Atlantic at 2:30 p.m.

Key graphics elements

The release of the technical camisole is confirmed, coming to give more meaning to the supporting of the mobile average at 20 days (in dark blue).

The buying position on the spot can be kept as long as the oscillations are built between this trend curve and the high bollingger strips (20; 2.5).

The relative force index (RSI) is in full convergence with the courses.

The index is currently in the sweater phase (graphic rejection).

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 7895.00 points would revive the tension to the purchase. While a break in the 7700.00 points would relaunch the selling pressure.

Hourly data graphics

Daily data graphics