CAC climbs on EU migration deal, French consumer spending

The CAC index has posted sharp gains in the Friday session. Currently, the CAC is at 5337, up 1.17% on the day. On the release front, French consumer indicators were mixed. Consumer spending rebounded with a gain of 0.9% in May, beating the estimate of 0.8%. This was a strong rebound from the 1.5% decline in April. CPI came in at 0.1%, matching the estimate, but down from the 0.5% gain a month earlier. In the eurozone, inflation estimates were as expected. Eurozone CPI Flash Estimate came in at 2.0%, matching the estimate. Core CPI Flash Estimate also matched expectations, with a gain of 1.0%.

There was some sorely needed good news for the markets on Friday, this time out of Brussels. European leaders announced with great fanfare that they had reached an agreement on the thorny issue of migrants and refugees. The issue had threatened to topple the German government, and countries such as Italy and Hungary were looking to drastically reduce immigration, putting them on a collision course with EU policy. Under the agreement, rescued migrants who are in EU territory will be sent to “control centers” in countries that agree to have them. The main entry point for refugees has been Italy and Greece, and under the agreement, other members will accept some of the migrants. Still, the deal was short on details, and appears to be a stopgap which papers over the deep divisions that still remain in the EU over immigration.

Escalating global trade tensions, which has seen the US and the EU continue to impose tariffs on each other’s products, has rocked the equity markets in recent weeks. It’s been a rough June for the CAC, which is down 2.0%. The main players in the trade battle are the U.S and China, the world’s two largest economies. With neither side ready to blink, there are growing fears that an all-out trade war will impact on both economies, which could trigger a global recession. With some tariffs set to come into effect on July 6, there appears more downside potential for the equity markets.

  EUR extends rebound on EU summit deal

  Markets buoyed by EU immigration deal

Economic Calendar

Friday (June 29)

  • 2:48 French Preliminary CPI. Estimate 0.1%. Actual 0.1%
  • 2:48 French Consumer Spending. Estimate 0.8%. Actual 0.9%
  • 5:00 Eurozone CPI Flash Estimate. Estimate 2.0%. Actual 2.0%
  • 5:00 Eurozone Core CPI Flash Estimate. Estimate 1.0%. Actual 1.0%
  • Day 2 – EU Economic Summit

*All release times are DST

*Key events are in bold

 

CAC, Friday, June 29 at 9:20 EDT

 Open: 5335 High: 5354 Low: 5318 Close: 5337

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

Market Analyst at OANDA
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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