CAC Boosted by Bank Shares

The CAC has posted considerable gains in the Wednesday session. Currently, the CAC is at  5433.30, up 0.79% since the Tuesday close. On the release front, French data was mixed. Consumer Spending declined 1.9%, missing the estimate of 0.0%. Preliminary GDP in the third quarter remained unchanged at 0.5%. In the US, Preliminary GDP is expected to post a strong gain of 3.3%, and Fed Chair Janet Yellen testifies before a congressional committee. On Thursday, the eurozone publishes CPI Flash Estimate.

A strong performance from bank stocks has boosted the CAC on Wednesday, after comments from Fed Designate Jerome Powell. BNP Paribas has jumped 1.83% and Credit Agricole has climbed 1.85%. At his confirmation hearing, Powell said that he favored tailoring regulations for small banks, leaving the toughest regulations for the big players. Powell takes over the helm of the Federal Reserve in February, and is expected to continue the Fed’s current monetary policy, which has been marked by small, incremental gains.

In Germany, President Angela Merkel continues efforts to form a new government. Coalition talks will now center on Merkel’s conservative bloc (CDU) and the social democrats (SPD). After the election, the SPD announced that it would remain in the opposition. However, coalition talks imploded when the Free Democrats pulled out of the negotiations and there is pressure on the SPD to reconsider in order to avoid elections. The SPD is split on whether to join a coalition with Merkel, as many SPD members don’t want the SPD to be relegated to a junior party in the coalition, as was the case prior to the election. Although the SPD has agreed to exploratory meetings with the CDU, substantial talks of a “grand coalition” are not expected to start before 2018. The SPD is likely to take advantage of Merkel’s weak hand and press demands for greater government spending and a looser immigration policy. The SPD could even demand the powerful finance ministry.


Economic Calendar

Wednesday (November 29)

  • 2:45 French Consumer Spending. Estimate 0.0%
  • 2:45 French Preliminary GDP. Estimate 0.5%
  • 8:30 US Preliminary GDP. Estimate 3.3%
  • 10:00 US Fed Chair Janet Yellen Testifies

Thursday (November 30)

  • 2:00 German Retail Sales. Estimate 0.3%
  • Tentative – ECB Financial Stability Review
  • 5:00 Eurozone CPI Flash Estimate. Estimate 1.6%

*All release times are GMT

*Key events are in bold


CAC, Wednesday, November 29 at 8:35 EDT

Open: 5418.45 High: 5434.25 Low: 5405.50 Close: 5433.30

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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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