CAC gains ground as European equity markets see green

The CAC index has posted considerable gains in the Tuesday session. Currently, the CAC is at 5425, up 0.87% on the day. On the release front, French PMIs were mixed. Manufacturing PMI remained pegged at 53.1, above the estimate of 52.6 points. Services PMI dropped to 55.3, shy of the forecast of 55.7 points. Eurozone PMIs showed a similar trend. The manufacturing PMI improved to 55.1, above the forecast of 54.7 points. Services PMI fell to 54.4, short of the estimate of 55.0 points.

With the tariff war threatening to hurt French and eurozone exports, investors have been keeping a close eye on manufacturing data. The July manufacturing PMIs pointed to expansion in France and eurozone and both releases ended a nasty streak of six straight drops. The CAC has moved higher on Tuesday, boosted by bank and automakers shares. BNP Paribas is up 2.09%, Renault has improved by 1.77%, while Peugeot has jumped 10.77%.

Will the EU and U.S patch up relations this week? The U.S slapped tariffs on EU steel and aluminum back in June, and the EU has since retaliated with tariffs on a range of U.S products. President Trump has not shied away from harsh criticism about the EU, and a recent NATO summit exposed the frosty relations between Trump and EU leaders. Still, there could be better news ahead, as EU President Jean-Claude Juckner meets with President Trump on Wednesday. If the talks show some progress, European equity markets could build on this week’s gains.

Economic Calendar

Tuesday (July 24)

  • 3:00 French Flash Manufacturing PMI. Estimate 52.6. Actual 53.1
  • 3:00 French Flash Services PMI. Estimate 55.7. Actual 55.3
  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 54.7. Actual 55.1
  • 4:00 Eurozone Flash Services PMI. Estimate 55.0. Actual 54.4

*All release times are DST

*Key events are in bold

 

CAC, Tuesday, July 24 at 7:30 EDT

 Open: 5399 High: 5433 Low: 5389 Close: 5425

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.