CAC 40: back below key resistance ahead of the Fed

The Fed and NFP are likely to be decisive for the CAC 40

The Paris stock returns to test key resistance at 6400 points ahead of the Fed. The outcome of the FOMC monetary policy meeting is likely to be decisive for the coming market days.

The risks are on the downside, given the resilience of the labor market and the acceleration of underlying inflation, the FOMC should again raise Fed rates by 75 basis points and the institution’s president should tighten the tone. In fact, Jerome Powell is likely to temper his hawkish rhetoric, as he did at the Jackson Hole symposium, to dismiss investor speculation about a quick “pivot” by the Fed.

Jerome Powell was to confirm that the pace of rate hikes will slow in the coming months, which is normal given that the Fed will not raise interest rates more than 300 basis points each year, but could announce that key rates will remain raised longer if necessary .

After the Fed, attention will turn to the monthly US employment report released on Friday. A better-than-expected jobs report would increase fears of an even more hawkish Fed and put pressure on equity markets, as we saw on Tuesday with the JOLTS report.

4-hour chart of CAC 40 (CFD France 40) price – key levels

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