CAC Posts Gains on Mixed French and Eurozone PMIs

The France CAC 30 has posted gains in the Tuesday session. Early in the North American session, the CAC is trading at 5360.75 points. On the release front, French and eurozone numbers were generally strong, as the services and manufacturing PMIs all pointed to expansion. On Wednesday, ECB president Mario Draghi will speak at an event in Madrid.

The eurozone has shown stronger growth in 2017, and a critical catalyst for this improvement has been a strong German economy, the largest in the eurozone. German numbers continue to meet or exceed forecasts. Final GDP for the first quarter remained at a respectable 0.6%, unchanged from the Preliminary GDP reading. The Ifo Business Climate report sparkled, climbing to 114.6, marking its highest level since 1991. As well, the manufacturing sector continues to expand, as German Manufacturing PMI improved to 59.4, its highest reading since February 2011. Exports and manufacturing propelled the economy in the first quarter, and these sectors should remain strong, so we can expect strong economic expansion in the second quarter as well. The strong manufacturing numbers in Germany have also boosted eurozone numbers, as the manufacturing sector continues to expand. Eurozone Manufacturing PMI climbed to 57.0 in April, the ninth straight month that the indicator has improved.

Greece hasn’t been in thee headlines for quite some time, but that could change. EU finance ministers met on Monday, and a key issue was debt relief for Greece. However, the ministers could not reach an agreement, and opted to try and hammer out an agreement at the June meeting. The uncertainty caused by the delay will only exacerbate concerns about the fragile Greek economy. Greece has undergone a severe austerity plan and understandably, the Greek government is reluctant to adopt further painful measures. Greece could be headed on a collision course with the EU, if the latter insists that the further reforms are needed. German Finance Minister Wolfgang Schaeuble had kind words for the Greeks, calling the reforms implemented by Greece as “remarkable”. At the same time, he insisted that Greece must take further steps before the EU provides further financial aid. Greek’s debt woes once resulted in the country almost leaving the eurozone, and if the EU continues to hold up debt relief, Greece’s place in the eurozone could be in question, which could hurt European stock markets.

Economic Calendar

Tuesday (May 23)

  • 3:00 French Flash Manufacturing PMI. Estimate 55.2. Actual 54.0
  • 3:00 French Flash Services PMI. Estimate 56.8. Actual 58.0
  • 4:00 Eurozone Flash Services PMI. Estimate 56.5. Actual 56.2
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 56.5. Actual 57.0

Wednesday (May 24)

  • 8:45 ECB President Mario Drahgi Speaks

*All release times are EDT

*Key events are in bold

CAC, Tuesday, May 23 at 8:35 EDT

Open: 5315.50 High: 5370.70 Low: 5315.00 Close: 5360.75

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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.