CAC 40: a major step on American employment health

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Not without nervousness, the CAC 40 has drawn a DOJI star candle, at the heart of a side work band – a range – between 7,500 and 7,940 points, against the backdrop of intense questions about bond, monetary, budgetary and political fronts, intimately nested fronts. It is Monday September 08 that the deputies will express their confidence, or will refrain from expressing it, to the Bayrou government. A deadline that marks the announced end of an austere budget comprising 44 billion euros in savings.

In the immediate future, it is American employment that will focus the attention of the markets this Friday, with the traditional NFP report (for non -Farm Payrolls) on private employment health, excluding agriculture. Note that weekly registrations for unemployment benefits, as is the investigation of the private cabinet ADP yesterday, little, expectations. According to the ADP/Standford Lab monthly survey, the United States has created 54,000 jobs in the private sector, against 75,000 positions expected by consensus and after 106,000 in July. Weekly unemployed registrations increased at 237,000 during the week of August 30 against 229,000 the previous week.

“The report on non-agricultural employment in the United States will provide an idea of ​​the potential magnitude of the drop in Fed rates this year. Its president, Jerome Powell, said that the labor market is now primarily on inflation in central bank decisions,” commented César Perez Ruiz, investment manager and CIO at Pictet Wealth Management.

Economists interviewed expect a slight increase in unemployment on an average of 4.3% of the active population, and 74,000 net of positions. Strong differences in consensus could have consequences both on the Treasuries 10 years and the estimated trajectory of federal rates.

“The Fed is thus in an uncomfortable situation. Its president, Jerome Powell, also judges that inflation linked to customs duties is temporary, but the high underlying inflation (3.1% in July) does not suggest any softening of monetary policy,” said Swiss Life AM economists.

In any case, the probabilities of decrease of 25 basic points for the remuneration of the Fed Funds at the end of the FOMC this month of September is however almost acquired.

“In parallel, the political pressure to lower the rates is immense. The low economic growth associated with the deterioration on the employment front could also justify a slightly less restrictive monetary policy. Low in July, the growth in employment has also been clearly revised downwards for the previous months. The unemployment rate is certainly stable compared to last year, at 4.2%, but many other indicators testify to the growing difficulty Employment.

On the values ​​side, Sanofi dropped by 8.3%, the positive results of the pharmaceutical laboratory in atopic dermatitis not contenting the stock market. What weighs on the Parisian market given its significant weight in the CAC 40. The luxury compartment was also poorly oriented, with LVMH which lost 4.2%, Kering 1.6%and Hermès 1.4%.

On the other side of the Atlantic, the main shares on shares finished the session of Thursday in the green, like the Dow Jones (+0.77%) and the Nasdaq Composite (+0.98%). The S & P500, a reference barometer of appetite for the risk in the eyes of fund managers, won 0.83% in the immediate vicinity of the 6,500 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 $ 1,1670. The barrel of WTI, one of the barometers of appetite for the risk on the financial markets, was exchanged around $ 63.20. THE Treasuries 10 Yearsyield of federal sovereign bonds due to 10 years, was negotiated slightly above 4.15%. As for the Vix, it was worth 15.30 at the last fence of the S&P500.

At the macroeconomic agenda this Friday, to follow the figures of the French trade balance at 8:45 am and the Federal NFP report on employment at 2:30 p.m.

Key graphics elements

The vast tidy (lateral canal), whose amplitude was once again redefined on July 31 and August 1, retains meaning, and the discharge of courses on Monday August 25, in contact with the high terminal confirms it. The 7,500 points are reinforced in their support role as much as the 7,940 points are in their role of resistance. They are therefore intervention areas to favor, in this clearly bipolarized market. A very technical market, which offers readable opportunities provided you remain yourself, as an investor, waterproof to ambient nervousness.

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 7940.00 points would revive the tension to the purchase. While a break in the 7682.00 points would relaunch the selling pressure.

Hourly data graphics

Daily data graphics