The Fed and the NFP will probably be decisive for the CAC 40
The Paris Stock Exchange returns to test key resistance at 6400 points ahead of the Fed. The outcome of the FOMC monetary policy meeting will likely be decisive for the next few market days.
The risks are on the downside, as given the resilience of the labor market and the acceleration of underlying inflation, the FOMC should again hike Fed rates by 75 basis points and the president of the institution should harden his tone. Indeed, Jerome Powell is likely to harden his hawkish rhetoric, as he did during the Jackson Hole symposium, in order to repel investor speculation of a rapid “pivot” from the Fed.
Jerome Powell is expected to confirm that the pace of rate hikes will slow over the next few months, which is normal given that the Fed will not raise rates more than 300 basis points each year, but could announce that the key rates will remain raised longer if necessary.
After the Fed, attention will be turned to the monthly report on employment in the United States published on Friday. A better than expected jobs report would heighten fears of an even more hawkish Fed, putting pressure on equity markets as we saw on Tuesday with the JOLTS report.
4 hour chart of CAC 40 price (CFD France 40) – key levels