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The mobile averages at 20 days (in dark blue) and 50 days (in orange) joined on the pair of Euro / dollar currencies, with the approach of important monetary appointments: tomorrow for the outcome of a BCE Governors’ Council and September 17 for a Fed Monetary Policy Committee. Two monetary institutions that are facing challenges of a different nature.
On the European side, a status quo on the rates proper is largely acquired, but the stake is elsewhere. The consecutive press conference will be an opportunity for Ms. Lagarde to react to the appointment of a new Prime Minister in France, and more generally to the political instability of the second economic power of the euro zone.
“It is widely awaited that the ECB maintains its rates at 2 % at the September meeting. Despite our fears about the excessive valuation of the euro, likely to compromise price stability, most BCE members do not seem to be concerned about these risks,” said Geoff Yu, Senior Emea Market Strategist at BNY, who thinks that “the president Lagarde will be particularly. Question from France, even if it does not seem necessary to take emergency measures, the spreats continuing to behave well.
Little reaction from the markets in any case to the appointment of M Lecornu in Matignon. “But this morning is noted this morning a rebound of the Spread Oat-bund, that is to say an increase in the gap between the two reference rates at 10 years of France and Germany. This rebound is still 8 base points which is not a completely trivial movement, the Spread was 76 base points last night and we flew this morning with the 84 base points”, nuance Alexandre Baradez for Ig France.
Under these conditions, a real test is played out on Friday with the fitch verdict on the sovereign note of France. On March 14, the famous and influential rating agency gave an “AA-” with a negative perspective to our country.
“The rates of French bonds (OAT at 10 years) are under pressure, treated at levels similar to those of Greece and Italy, around 3.50 %. The deviations with these countries are now insignificant, suggesting that investors consider the OAT as equivalent to sovereign debts of lower quality, although France benefits from an aa- compared to BBB and BBB- Italy and Greece, which can suggest a gap of rating agencies in their evaluation, “observes Andrea Tueni, responsible for market activities at Saxo Banque.
“France has recorded in 2024 the largest budget deficit in the countries of the euro zone due mainly to the importance of its primary deficit (budgetary deficit outside of interest). It is committed to the European Commission to reduce its deficit under 3 % of GDP in 2029 which supposes a clear budgetary consolidation given the strong slips recorded in the past 2 years. To return to primary surplus on this horizon, which has not happened since the late 1990s in the early 2000s, and this sustainably “, decrypts for Aline Goupil-Raguénès, strategist developed country of Ostrum AM.
On the other side of the Atlantic, it was on September 17 that the Fed will complete its monetary policy meeting. A FOMC which could even end by a drop of 50 base points at a blow of the remuneration of the Fed Funds, with a probability of 8% according to the Fedwatch tool of the CME Group. A 25% drop scenario is estimated at 82% chance of achievement, and a status quo, by the arithmetic force, at … 0%!
“The notable slowdown in the labor market should help to mitigate some of the Fed concerns concerning second -hand effects (for example higher inflation expectations) leading to more persistent inflation. We do not foresee a recession and always anticipate a relatively progressive return to neutrality as inflation normalizes. That said, the accumulation of signs of low labor market justifies, Rhythm of monetary easing faster than what we were projected previously, “continued Ms. Wilding.
Until then, the Bover will read this Wednesday of producer prices and tomorrow retail prices in the United States, two additional measures of inflation.
At midday on the foreign exchange market, the euro was treated against $ 1,1710 approximately.
Key graphics elements
The pair of Euro / dollar currencies is in the marked ascending phase, background, above an oblique right that makes sense. We have represented this linear level of graphic support in black. In the immediate future, we will keep an eye attentive to the relative positioning of the mobile averages at 20 (in dark blue) and 50 days (in orange) to optimize the entry points.
Medium term
In view of the key graphic factors that we have mentioned, our opinion is neutral in the medium term on Euro dollar parity (Eurusd).
We will keep this neutral opinion as long as the EURO Dollar (EURUSD) prices are positioned between the USD 1,1608 support and the resistance to 1,1835 USD.
The News Bulletin 247 Council
Daily data graphics
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