CAC Gains Ground as French Payrolls Beats Estimate

The CAC has posted gains in the Tuesday session. Currently, the index is at 5409.00, up 0.45% on the day. On the release front, French Final Private Payrolls edged down to 0.3%, but beat the forecast of 0.2%. Eurozone ZEW Economic Sentiment also softened, with a reading of 29.0. This was short of the 30.2 points. Later in the day, ECB President Mario Draghi speaks at an event in Frankfurt. The Federal Reserve is expected to raise the benchmark rate to a range between 1.25% to 1.50%.

Later this week, we’ll get a good look at economic activity in France, with the release of services and manufacturing PMIs, as well as Final CPI. The PMI reports are expected to indicate expansion, continuing the trend we’ve seen throughout 2017. The French economy has been marked by stronger growth and lower unemployment, and investor and business confidence has been boosted by the election of pro-business Emmanuel Macron as president. Still, inflation remains a sore point, as levels remain well short of the ECB target of around 2.0%. French Final CPI is expected to post a negligible gain of 0.1%, unchanged from the previous reading.

All eyes are on the Federal Reserve, with the markets are expecting a quarter-point rate hike from the Fed on Wednesday. Even though this move has been priced in, rate hikes tend to trigger a surge of confidence among investors, and could trigger gains in global stock markets. Another rate hike is expected in January, with fed futures pricing a rate hike at 87%. The Fed has hinted that it could raise rates up to three times in 2018, and this upward movement in rates will likely propel the US dollar upwards. The  US labor market remains at full capacity and various sectors in the economy are reporting a lack of workers. Still, this has not translated into stronger wage growth, despite predictions from Janet Yellen and other Fed policymakers that a lack of workers is bound to push up wages.

 

 

Economic Calendar

Tuesday (December 12)

  • 1:30 French Final Private Payrolls. Estimate 0.2%. Actual 0.3%
  • 5:00 Eurozone ZEW Economic Sentiment. Estimate 30.2. Actual 29.0
  • 14:00 ECB President Mario Draghi Speaks

Wednesday (December 13)

  • 5:00 Eurozone Employment Change. Estimate 0.4%
  • 5:00 Eurozone Industrial Production. Estimate -0.2%
  • 14:00 US Federal Funds Rate. Estimate <1.50%

*All release times are GMT

*Key events are in bold

 

CAC, Tuesday, December 12 at 7:35 EDT

Open: 5393.95 High: 5410.50 Low: 5358.50 Close: 5411.00

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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.