CAC Higher on Sharp French PMIs

The CAC continues to gain ground this week. Currently, the CAC is at 5386.15 up 0.62% on the day. On the release front, French numbers were sharp. Manufacturing PMI improved to 57.5, and Services PMI climbed to 60.0, as both indicators beat expectations. Later in the day, the ECB releases the minutes of its October policy meeting.

It’s been a good week for the CAC, which has gained 1.4% in that time. The index has padded gains on Thursday, as French Service and Manufacturing PMIs both accelerated in October. The numbers reflect a stronger French economy, which has benefited from improved growth in the eurozone.

The ECB releases the minutes of the October policy meeting, and the markets will be looking for clues regarding future monetary policy. At the meeting, the ECB took the long-awaited step of tapering its asset-purchase program, announcing that monthly asset purchases would be cut from EUR 60 billion to EUR 30 billion. At the same time, the ECB extended the program to September 2018. The markets viewed this as a dovish statement, and if the minutes reinforce this view, the euro could lose ground.

With Germany, the largest economy in the eurozone in political paralysis, there are concerns whether this will affect the eurozone economy. In the short-term, the economy should be able to weather the crisis, but future growth could be in jeopardy if the political deadlock continues. The euro and European stock markets have remained steady since the coalition talks fell apart last week, indicating that investors remain upbeat about economic growth in the eurozone. Euro-supporters such as French President Emmanuel Macron have ambitious plans to strengthen European integration, but this will have to wait until German President Angela Merkel can straighten out her domestic challenges. Macron wants to take advantage of Britain leaving the EU and solidify France’s position in the bloc. His proposals include a budget and a finance minister for the eurozone.

Economic Calendar

Thursday (November 23)

  • 3:00 French Flash Manufacturing PMI. Estimate 55.9. Actual 57.5
  • 3:00 French Flash Services PMI. Estimate 57.1. Actual 60.2
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 58.3. Actual 60.0
  • 4:00 Eurozone Flash Services PMI. Estimate 55.2. Actual 54.9
  • 7:30 ECB Monetary Policy Meeting Accounts

*All release times are GMT

*Key events are in bold

CAC, Thursday, November 23 at 7:35 EDT

Open: 5342.00 High: 5394.50 Low: 5330.50 Close: 5386.15

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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