CAC Jumps on Strong Corporate Earnings

The CAC index has posted strong gains in the Thursday session. Currently, the index is at 5,241.75, up 1.47% since the close on Wednesday. On the release front, the eurozone trade surplus widened in December, climbing to EUR 23.8 billion. This beat the forecast of EUR 22.4 billion.

US markets were higher on Wednesday, and European stock markets have followed suit in Thursday trade. US investors shrugged off soft retail sales as well as higher inflation. The recent sell-off was triggered by concern that stronger inflation would lead to an acceleration in rate hikes. So far, the stronger CPI numbers out of the US have not spooked investors, but if US data continues to beat expectations, the market sell-off could resume. In Europe, strong corporate earnings reports have boosted the markets on Thursday. The bank sector is looking sharp, and CAC banking shares are higher – BNP Paribas has jumped 1.92%, and Credit Agricole is up 1.55%.

ECB President Mario Draghi said last week that he is more confident that eurozone inflation is moving closer to the ECB target of just below 2 percent, due to improving economic growth. However, Draghi listed currency market volatility as an obstacle to the inflation target, and added that the ECB would carefully monitor the euro’s exchange rates. Draghi’s concerns about the exchange rate have been underscored by last week’s stock market turbulence, which boosted the dollar and sent the euro lower by 1.6 percent. The ECB tapered its massive stimulus program from EUR 60 billion to 30 billion/mth in January, and the markets are looking for hints as to whether the ECB will normalize policy and wind up stimulus in September.

 

Economic Calendar

Thursday (February 15)

  • 5:00 Eurozone Trade Balance. Estimate 22.4B. Actual 23.8B

*All release times are GMT

*Key events are in bold

CAC, Thursday, February 15 at 6:25 EDT

Open: 5,210.20 High: 5,255.50 Low: 5,207.50 Close: 5,241.75

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.