CAC Slide Continues Despite Solid Eurozone Data

The CAC remains under pressure, and has posted slight losses on Tuesday. Currently, the CAC is at 5,331.50, down 0.19% on the day. On the release front, Eurozone Flash GDP remained unchanged at 0.6%, matching the forecast. ZEW Economic Sentiment jumped to 30.9, above the estimate of 29.3 points. Central bankers will attend an ECB event in Frankfurt, and the markets will be listening closely to Mario Draghi and Janet Yellen. On Wednesday, the eurozone releases Trade Balance.

The eurozone economy received a respectable grade on Tuesday, as Flash GDP for the third quarter came in at 0.6%. The eurozone expanded in Q3 at an annualized rate of 2.5%. Germany’s robust economy has led the way, with annualized growth of 2.8%, but traditional laggards France and Italy have also rebounded in 2017. At the same time, steady growth has failed to boost inflation, which remains well behind the ECB’s target of around 2.0%. German Final CPI underscored the lack of inflation, with a reading of 0.0% in October. As long as inflation remains at low levels, the ECB is likely to continue its asset purchases program.

Heads of central banks are meeting on Tuesday in Frankfurt, and will be discussing how to communicate with the markets. With central banks signalling major policy shifts, communicating clearly is a critical skill. Janet Yellen and Mario Draghi will both be participating in the discussions. The ECB is set to taper its asset-purchase program in January, while the Fed has started trimming its massive balance sheet. Both Yellen and Draghi are all-too-familiar with unwanted movement in the currency markets when investors were kept in the dark or misinterpreted the Fed or the ECB. Investors will be listening carefully, looking for clues regarding future monetary policy.

Economic Calendar

Tuesday (November 14)

  • 5:00 ECB President Mario Draghi Speaks
  • 5:00 Eurozone Flash GDP. Estimate 0.6%. Actual 0.6%
  • 5:00 Eurozone Industrial Production. Estimate -0.6%. Actual -0.6%
  • 5:00 Eurozone ZEW Economic Sentiment. Estimate 29.3. Actual 30.9

Wednesday (November 15)

  • 2:45 French Final CPI. Estimate 0.1% 
  • 5:00 Eurozone Trade Balance. Estimate 21.4B

*All release times are GMT

*Key events are in bold

CAC, Tuesday, November 14 at 7:10 EDT

Open: 5349.00 High: 5368.00 Low: 5330.50 Close: 5331.50

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

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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