EUR/USD: Ms. Lagarde, the French budgetary situation scares you?

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The euro / dollar remained almost stable, in an area of ​​convergence of its mobile averages at 20 days and 50 days, as the BCE governors’ council approaches. The European Central Bank should not affect its guiding rates, but the stake is elsewhere. Christine Lagarde, president of the powerful pan -European monetary institution, will obviously be questioned at a press conference on the budgetary situation, against a background of political instability.

Edouard Faure, head of the Crédit France Department of Swiss Life Asset Managers France, anticipates: “The European Central Bank (ECB) should opt for the status, now the rate of ease of deposit at 2%. A decision largely anticipated by investors. Christine Lagarde should also reaffirm the primacy of the” data de -dependent “approach in the development of monetary policy in Frankfurt. that planned growth prospects in the euro zone by the next October meeting could justify a new drop in guiding rates next month. “

At 2:15 p.m., the monetary policy decision proper and at 2:45 p.m. will be communicated to the press conference.

“On the European credit market, the levels of return on investors remain attractive and continue to justify positive flows on the asset class despite the climate of uncertainty. Nevertheless, current economic forecasts incur approximately third of future customs barriers. An adjustment of forecasts could contribute to a new degradation of economic prospects and a possible inflation revival. Parameters that investors must take into account in the same way as geopolitical risk.

It is in this very dense calendar that the Fitch agency will make its new verdict on French debt tomorrow. “If despite everything, France remains, for the moment, a secure placement in the eyes of investors, the rating agencies could however quickly degrade its note. Starting with Fitch which can decide on Friday to lower the French note of AA- to A+. Which would have the consequence of acting the end of the ambitions of reducing the deficit of € 44 billion in 2026 and the impossibility of bringing the French public balance to -3 % 2029. Thus, the more political and budgetary uncertainty persists, the more France’s financing cost on the markets can jump in the short term “, alerts Grégoire Kounowski, Investment Advisor at Norman K.

As of Tuesday evening, the Head of State, who took note of the resignation of François Bayrou, appointed Sébastien Lecornu, Minister of the resigning armies, in Matignon. If the profile of the ex Sarkozist, a lover of hunting and whiskey, is not on paper likely to scare the financial markets, this is the question of his ability to maneuver and negotiate, text by text, with a fragmented national assembly, which arises again.

Raphaël Thuin, Director of capital market strategies at Tikehau Capital, warns: “The risk for France would consist of navigating the duration between political immobility and slow degradation of its economic fundamentals. If no brutal shock is expected in the short term, the accumulation of uncertainties could, in the medium term, weigh on its growth and its credibility. A stable government-as well as the patience of investors with regard to negative dynamics that erude the country’s credibility. “

On the statistical front, the American production prices for the month of August were the statistical meeting of the day on Wednesday. And against all expectations, the production price index (PPI) fell 0.1% while the consensus awaited an increase of 0.3%. They had increased by 0.7% in July. To follow the ICCs (consumer price), another measurement of inflation, this Thursday at 2:30 p.m. (Paris time).

At midday on the foreign exchange market, the euro was treated against $ 1,1690 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.

Daily data graphics