The CAC index has posted slight losses in the Tuesday session. Currently, the CAC is trading at 5,503.80, down 0.07% on the day. On the release front, France’s deficit narrowed to EUR 76.3 billion, down from EUR 93.0 billion a month earlier. Eurozone consumer spending numbers were mixed. Retail PMI slowed to 51.1, down from 52.3 in the previous reading. Retail Sales rebounded with a gain of 0.7%, edging above the forecast of 0.6%. On Wednesday, France releases its trade balance, with a deficit expected of EUR 4.7 billion.
In the eurozone, retail sales reports were mixed on Tuesday. Retail PMI came in at 51.1 in October, pointing to muted expansion in the retail sector. There was much better news from September retail sales, as gain of 0.7% came after two straight declines, and was the strongest gain since February. The markets are hoping for strong euorozone consumer spending in the fourth quarter, given the robust German economy and stronger economic conditions in the eurozone.
A cornerstone of Donald Trump’s domestic policy is an overhaul of the tax code, and this stance has fueled a rally in global stock markets since Trump took office a year ago. Trump suffered a humiliating defeat with his failed health care proposal, and he hopes to do better with tax reform. The White House wants Congress to pass legislation overhauling the tax code before the end of the year, but that will be a tall order, as most Democrats have come out against the proposal, and not all Republicans are on board. The bill would cut corporate taxes from 35% to 20%, but predictably, Democrat and Republican lawmakers are at odds as to whether the bill will lower taxes for the middle class. If Congress does pass tax reform, global stock markets could move higher.
Tuesday (November 7)
- 2:45 French Government Budget Balance. Actual -76.3B
- 4:00 ECB President Mario Draghi Speaks
- 4:10 Eurozone Retail PMI. Actual 51.1
- 5:00 Eurozone Retail Sales. Estimate 0.6%. Actual 0.7%
- All Day – ECOFIN Meetings
Wednesday (November 8)
- 2:45 French Trade Balance. Estimate -4.7B
*All release times are GMT
*Key events are in bold
CAC, Tuesday, November 7 at 7:30 EDT
Open: 5522.00 High: 5527.50 Low: 5498.50 Close: 5503.80