The CAC 40 is marking time as they await PMIs, PCE inflation and Fed speeches
The CAC 40 has stalled since last week after climbing to a 7-month high, slightly above peaks in June and August, thanks to investor speculation about less aggressive Fed tightening.
However, the market may resume the downward path in the coming days as these expectations are likely to be dampened by PCE inflation at the end of the month and/or the numerous interventions by Fed officials in the coming days.
In fact, risks are tilted to the downside as speculators have almost completely eclipsed the scenario of another 75 basis point Fed rate hike next month in favor of the 50 bps scenario. The probability of another 75 bps rate hike is only 24% compared to 77% on October 19th and 40% before the US CPI release on November 10th.
In addition to central bank interventions and the PCE inflation announcement, traders will also watch November’s flash PMIs. Released on Wednesday, the PMIs will give an idea of the state of economic growth in the main economic regions.
The numbers below expectations could be bullish in the very short term as it would increase the chances of a slowdown in monetary policy tightening, but it would be bearish in the long term as it would increase the chances of a recession.
Daily Chart of CAC 40 Price – Key Levels