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CAC Slips as European Stock Markets Under Pressure

The CAC index has lost ground in the Tuesday session. Currently, the index is at 5493.80, down 0.50% on the day. On the release front, French Flash GDP edged up to 0.6%, beating the estimate of 0.5%. Eurozone Preliminary Flash GDP for the fourth quarter remained unchanged at 0.6%, matching the forecast. Later in the day, the eurozone releases Preliminary CPI for Q4, with the markets braced for a decline of 0.5%. As well, President Trump will deliver his State of the Union address before Congress. On Wednesday, the eurozone releases CPI Flash Estimate. In the US, the Federal Reserve will release a monetary policy statement, with the markets expecting the benchmark rate to remain unchanged at a range between 1.25%-1.50%.

Eurozone numbers for fourth quarter 2016 remain solid, led by strong German data. Eurozone Preliminary Flash GDP posted a respectable gain of 0.6%, unchanged from the Q3 release. French Flash GDP also gained 0.6% in Q4. An improved trade balance boosted the GDP release, aided by stronger exports and lower imports. On an annual basis, French GDP expanded 1.9%, substantially better than the 1.6% reading in 2016.

The euro posted strong gains last week, after US Treasury Secretary Robert Mnuchin said that the US had no problem with a weak dollar. ECB policymakers were not pleased with Mnuchin’s statement, and Mario Draghi, without naming Mnuchin, said that such comments amounted to “targeting the exchange rate”. Mnuchin has since backtracked, saying that his words were taken out of context and that the US has a long-term interest in a strong dollar. President Trump added that Mnuchin was misinterpreted, but these attempts at damage control haven’t had much effect, as EUR/USD has traded sideways since the Mnuchin comments.

Dollar Diddles for the Middle as Stocks see Red [1]

Economic Calendar

Tuesday (January 30)

Wednesday (January 31)

*All release times are GMT

*Key events are in bold

CAC, Tuesday, January 30 at 7:50 EDT

Open: 5493.50 High: 5519.75 Low: 5492.30 Close: 5493.80

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 [5]

Market Analyst at OANDA [6]
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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