CAC Slips as Catalan Voters Rebuke Rajoy

The CAC index has lost ground in the Friday session. Currently, the index is at 5360.50, down 0.35% on the day. On the release front, there was only one event. French Consumer Spending climbed 2.2%, crushing the forecast of 1.4%.

The French economy continues to rebound, as indicators in the second largest economy in the eurozone continue to point upwards. The economy has been expanding, exports are up and unemployment has dropped. Consumer spending, a key driver of economic growth, looked sharp in November, jumping 2.2%. The impressive reading comes after a decline of 1.9% in October and marked the highest gain since February 2012. This is the final French event of 2017, and the stock markets are likely to be subdued during the Christmas holidays.

European stock markets are digesting the results of Thursday’s Catalan election. With no party winning an outright majority, the uncertainty could spook investors and hurt the stock markets. Although a nationalist party scooped up the most seats, three pro-independence parties have won 70 seats out of 135, good enough for a slim majority. The vote is a stinging rebuke for Spanish Prime Minister Mariano Rajoy, who has imposed direct rule on the region, called the snap election with the hope that the independence movement would lose momentum. However, this tactic clearly failed and Spain could be headed for more political turmoil in the coming months.

Economic Calendar

Friday (December 22)

• 2:45 French Consumer Spending. Estimate 1.4%. Actual 2.2%

*All release times are GMT

*Key events are in bold

CAC, Friday, December 22 at 6:20 EDT

Open: 5369.50 High: 5385.80 Low: 5358.00 Close: 5367.30

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