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CAC Dips as Financial Stocks Falter

The CAC is in red territory on Wednesday. Currently, the index is at 5352.00, down 0.45% on the day. Financial stocks are down, with BNP Paribas and Credit Agricole recording declines of 1.04% and 1.74%, respectively. On the release front, the sole eurozone release is Retail PMI, which improved to 52.4. This marked a seven-month high. On Thursday, France will release Trade Balance, with the trade deficit expected to remain unchanged at EUR 4.7 billion.

On Tuesday, French Final Services PMI looked sharp, punching above the symbolic 60-point level. This marked the indicator’s highest level since May 2011. The strong reading is indicative of strong expansion, as the service sector has been buoyed by strong customer demand and strong economic conditions. French service providers remain optimistic that activity in the sector will increase in the upcoming 12-month period. The French economy has rebounded in impressive fashion in 2017, and looks to wrap up the year on firm footing, as a strong manufacturing sector has triggered improved job growth.

The eurozone economy has enjoyed a strong rebound in 2017, marked by steady growth and lower unemployment. The ECB has projected GDP of 2.2% and inflation of 1.2% for 2017. The economic recovery pushed the ECB into action, which  tapered its asset purchase program, although it did extend the program until September 2018. Still, the cautious ECB said on Wednesday that it was concerned about “increased risk-taking behavior in global financial markets” as this could lead to sharp asset price corrections. The ECB is also keeping its eye on political uncertainty in Europe, notably the deadlocked Brexit negotiations and the political vacuum in Germany. In the meantime, European stock markets remain at high levels and the euro is enjoying the view from the 1.18 level.

Economic Calendar

Wednesday (December 6)

Thursday (December 7)

*All release times are GMT

*Key events are in bold

CAC, Wednesday, December 6 at 7:10 EDT

Open: 5328.80 High: 5361.80 Low: 5315.50 Close: 5352.00

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 [4]

Market Analyst at OANDA [5]
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 Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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