(News Bulletin 247) – Phew of relief on Tuesday with the publication of a price increase rate across the Atlantic that was a little less sustained than expected. Result: the Treasuries 10 years are ebbing somewhat, and the Nasdaq Composite is regaining pre-opening color. In detail, the consumer price index, in data core (adjusted for food and energy, highly volatile data), gained 0.3% in March, month-on-month. So much for core inflation. On the other hand, taking into account the largest basket of products, monthly growth is 1.2%, in line with expectations.
After making a foray above 2.83 yesterday, 10-year US government bond yields are therefore falling back towards 2.73, on the back of relief from the Fed’s recent tightening of stance. Not enough to sweep away any probability of seeing the next FOMC result in a 50 basis point rise in Fed Funds.
“If they want to fight against inflation, central banks will be forced to make their policy restrictive, but at the risk of causing a recession and/or a financial crisis”, summarizes Marie-Pierre RIPERT, Head of Economic Studies (SMA Gestion). “In practice, will they take this risk or will they accept higher inflation at the risk of losing their credibility? In the medium term, the change in the inflation regime that is looming means that central banks will no longer be able to excessively expansionary monetary policies in a sustainable way.”
KEY GRAPHIC ELEMENTS
On the technical side, as long as the flagship index of technology stocks on the American side remains above 13,838 points, nothing is to be feared. This is a technical threshold easily regained, on a combination of candles in “three advancing soldiers”, from March 16 to 18. A move below 14,445 points was validated on Thursday signifying a reintegration of a trading range above 13,330 points. All against a background of divergence between prices and volumes. The first bearish CT objective at 13,840 is reached. The second (13,330) is in the viewfinder. In the immediate and very short term, however, a jump is the preferred option at the level of the session to come.
FORECAST
Considering the key chart factors we have mentioned, our opinion is positive on the Nasdaq Composite index in the short term.
This bullish scenario is valid as long as the Nasdaq Composite index quotes above the support at 13330.00 points.
CHART IN DAILY DATA
©2022 News Bulletin 247
I am currently a news writer for News Bulletin247 where I mostly cover sports news. I have always been interested in writing and it is something I am very passionate about. In my spare time, I enjoy reading and spending time with my family and friends.
