CAC Edges Lower Despite Strong Investor Confidence

The CAC index is slightly lower in Monday trade. Currently, the index is at 5,113.80, down 0.18% on the day. On the release front, it’s a quiet start to the trading week. Eurozone Sentix Investor Confidence climbed to 28.2, above the forecast of 27.4 points. Eurozone PPI continues to improve, coming in at 0.0%, short of the estimate of 0.1%. On Tuesday, we’ll get a look at French Final Services, Eurozone Revised GDP and Eurozone Retail Sales.

The eurozone economy continues to hum in the second half of 2017, as economic indicators have generally been positive. Investors and analysts continue to give the economy a thumbs-up, as the Sentix Investor Confidence improved to 28.2, pointing to strong optimism. Germany, the largest economy in the bloc, continues to lead the eurozone with robust growth, but France and others have also improved in 2017. Last week, French numbers impressed, as CPI and Consumer Spending rebounded with gains, following declines in the previous release. As well, Preliminary GDP improved to 0.5% in the second quarter.

A stronger eurozone economy has raised questions as to what monetary moves the ECB has planned – will it finally taper its ultra-accommodative monetary policy? The bank’s asset purchases program is scheduled to end in December, and analysts expect the ECB to withdraw stimulus in early 2018. Still, the ECB has not provided much guidance as to its plans. ECB President Mario Draghi was mum on monetary policy at last week’s meeting of central bankers at Jackson Hole, following the lead of Federal Reserve Chair Janet Yellen. However, the ECB head will not get another free pass this week, as the ECB holds its next policy meeting on Thursday. Any discussion about tapering the ECB’s asset purchase program could have a strong effect on European stock markets.

 

Economic Calendar

Monday (September 4)

  • 4:30 Eurozone Sentix Investor Confidence. Estimate 27.4. Actual 28.2
  • 5:00 Eurozone PPI. Estimate 0.1%. Actual 0.0%

Upcoming Events

Tuesday (September 5)

  • 3:50 French Final Services PMI. Estimate 55.5
  • 4:00 Eurozone Final Services PMI. Estimate 54.9
  • 5:00 Eurozone Retail Sales. Estimate -0.2%
  • 5:00 Eurozone Revised GDP. Estimate 0.6%

*All release times are EDT

*Key events are in bold

CAC, Monday, September 4 at 9:05 EDT

Open: 5088.50 High: 5117.35 Low: 5088.50 Close: 5113.80

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.