CAC Ticks Lower, Catalonia Suspends Declaration of Independence

The CAC index has inched lower in the Wednesday session. Currently, the CAC is trading at 5,357.80, down 0.07% on the day. On the release front, there are no French or eurozone events on the schedule.

France’s public sector workers held a nationwide strike on Tuesday, in protest of the government’s plans to dismiss 120,000 public sector workers and reduce sick leave benefits. The government has promised to continue negotiations with unions, and this has led to split among unions over how to respond to Macron’s reforms. Although this strike was endorsed by all 9 of France’s public service unions, the government said that only 14 percent of state public workers went on strike. French President Emmanuel Macron’s appears determined to reform the economy and trim the public sector, arguing that deep reforms are needed in order to make the French economy more competitive.

All eyes remain on Spain, after Catalan President Carles Puigdemont declared independence, but quickly qualified the move by suspending any formal secession moves. Puigdemont announced that he is open to dialogue with the Spanish government, but Madrid continues to take a hard line against the Catalan leader. The Spanish government is holding an emergency meeting to determine its response, and is reportedly considering imposing Article 155 of Spain’s constitution, which would allow the government to suspend the Catalan government and hold new elections. This “nuclear option” could mark a steep escalation in the constitutional crisis. Although Catalan leaders say they have a mandate for independence based on the referendum (in which 90% voted for independence), Catalans are deeply divided over the issue. Several banks and major companies have announced they will move their legal headquarters from Barcelona to Madrid, and the constitutional crisis could take a toll on the Spanish economy if the stalemate continues. However, the crisis is not expected to affect the eurozone, and French stock markets have remained steady this week.

Europe Higher as Catalans Seek Talks With Madrid

 

Economic Calendar

Wednesday (October 11)

  • There are no French or eurozone events on the calendar

 

 

CAC, Wednesday, October 11 at 6:30 EDT

Open: 5367.00 High: 5367.00 Low: 5345.80 Close: 5359.80

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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.