CAC Ticks Lower, Eurozone CPI Ahead

The CAC index has posted slight losses in the Thursday session. Currently, the index is at 5,299.00, down 0.06% since the close on Wednesday. On the release front, French CPI declined 0.1%, matching the forecast. This marked the first decline in four months.As well, the ECB released the minutes of its January policy meeting. On Friday, the eurozone publishes Final CPI.

It’s been a rough ride February for global stock markets, and the CAC has shed 3.9 percent so far this month. Much of the correction can be attributed to concerns of tighter policy from both the Federal Reserve and the ECB. Ironically, these concerns have been heightened by strong economic data in the eurozone and the US, which have stoked fear of higher inflation and more rate hikes. Analysts are forecasting that the Fed could change its projection of three hikes in 2018, and could press the rate trigger four or five times. As for the ECB, it appears in no rush to raise interest rates anytime soon, and there is little pressure to do so, as there is plenty of slack in the economy. However, the ECB asset purchase program is scheduled to wind up in September, and if eurozone growth remains solid and inflation moves upwards, there will be pressure on the ECB to raise rates in the fourth quarter of 2018 or early in 2019.

The Federal Reserve released the minutes of its January meeting, and as expected, the benchmark rate was left unchanged at a rate between 1.25% and 1.50%. The message from policymakers was that further rate hikes could be in the cards, due to strong economic conditions in the US. In the words of the minutes, policymakers “anticipated that the rate of economic growth in 2018 would exceed their estimates of its sustainable longer-run pace and that labor market conditions would strengthen further”. At the December meeting, the Fed penciled in three rate hikes in 2018, and there was no reference to a quicker pace of hikes in the January minutes. As for inflation, the minutes did not reveal any concern. Most Fed members were of the opinion that inflation would rise towards the Fed target of 2 percent.

 

Economic Calendar

Thursday (February 22)

  • 2:45 French Final CPI. Estimate -0.1%. Actual -0.1%
  • 7:30 ECB Monetary Policy Meeting Accounts

Friday (February 23)

  • 5:00 Eurozone Final CPI.  Estimate 1.3%

*All release times are GMT

*Key events are in bold

CAC, Thursday, February 22 at 9:40 EDT

Open: 5,271.00 High: 5,296.30 Low: 5,253.30 Close: 5,299.00

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.

CAC Steadies After Starting Week With Losses, PMIs Next

The CAC index is showing little movement in the Tuesday session. Currently, the index is at 5,259.80, up 0.07% since the close on Monday. On the release front, German and eurozone confidence reports for February beat the forecasts, but were weaker than the January releases. German ZEW Economic Sentiment came in at 17.8, beating the estimate of 16.0 points. Eurozone ZEW Economic Sentiment dropped to 29.3, above the estimate of 28.4. On Wednesday, Germany and the eurozone release manufacturing PMIs. In the US, the Federal Reserve will release the minutes of its January meeting.

 

Eurozone indicators continue to point upwards, and French manufacturing and services PMI reports have been solid, pointing to expansion in the manufacturing and services sectors. The markets are not expecting much change in the February PMIs. Strong global demand has boosted manufacturing, and steady consumer spending has buoyed the services sector. President Macron is aggressively pursuing economic reforms, and this has renewed confidence in the French economy on the part of consumers and institutional investors.

Should cryptocurrencies be regulated? The recent turbulence in the global stock markets has triggered strong volatility in the currency markets, and ECB President Mario Draghi recently stated that the ECB was concerned about the euro’s sharp fluctuations. Last week, Draghi weighed in on Bitcoin, a cryptocurrency which has seen wild fluctuations in recent months. There are growing calls for regulation of these currencies, and central banks could play a key role in such oversight. However, Draghi poured cold water on any ECB involvement, saying that it was not the ECB’s responsibility to ban or regulate Bitcoin. Draghi added that the ECB was exploring the use of blockchain, a digital technology to monitor bitcoin transactions. France and Germany want to cryptocurrencies on the agenda at the next G-20 meeting, and there is bipartisan support in Congress to adopt new rules to regulate virtual currencies.

 

Economic Calendar

Tuesday (February 20)

  • 5:00 German ZEW Economic Sentiment. Estimate 16.0. Actual 17.8
  • 5:00 Eurozone ZEW Economic Sentiment. Estimate 28.4. Actual 29.3
  • All Day – ECOFIN Meetings
  • 10:00 Eurozone Consumer Confidence. Estimate 1

Wednesday (February 21)

  • 4:00 Eurozone Flash Manufacturing PMI. Estimate 59.2
  • 4:00 Eurozone Flash Services PMI. Estimate 57.7
  • 14:00 US FOMC Meeting Minutes

*All release times are GMT

*Key events are in bold

 

CAC, Tuesday, February 20 at 7:00 EDT

Open: 5,210.20 High: 5,255.50 Low: 5,207.50 Close: 5,259.80

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.

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.

CAC Climbs on Strong German, Eurozone GDP Reports

The CAC index has posted strong gains in the Wednesday session. Currently, the index is at 5,155.30, up 0.91% on the day. It’s a busy day on the release front, with key releases in Germany, the eurozone and the US. In Germany Preliminary GDP posted a gain of 0.6%, matching the estimate. Eurozone Flash GDP for Q4 remained steady at 0.6% for a third straight quarter, matching the estimate. In the US, the markets are expecting mixed inflation numbers. Core CPI is expected to expected to edge lower to 0.2%, while CPI is forecast to improve to 0.1%.

It’s been a rough ride for the CAC, which declined 3.6% last week and has plunged 6.9% so far this month. However, the index has steadied this week, and is in green territory on Wednesday. The CAC is up almost 1%, and the strong gains have been pared by sharp losses in the banking sector, as Credit Agricole is down 3.33%. Much of the recent sell-off can be attributed to investor concern over higher inflation in the US, which could lead to raise hikes from the Federal Reserve and other central banks. Inflation has also moved higher in the eurozone, although with plenty of slack in the economy, the ECB is not contemplating any rate hikes. Investors across the globe, who endured a massive sell-off last week, will be keeping a close eye on US inflation indicators. If these releases are higher than expected, global stock markets could resume their downward spiral.

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

Wednesday (February 14)

  • 5:00 Eurozone Flash GDP. Estimate 0.6%. Actual 0.6%
  • 8:30 US CPI. Estimate 0.3%
  • 8:30 US Core CPI. Estimate 0.2%

Thursday (February 15)

  • 5:00 Eurozone Trade Balance. Estimate 22.4B

*All release times are GMT

*Key events are in bold

CAC, Wednesday, February 14 at 2:25 EDT

Open: 5,131.50 High: 5,158.50 Low: 5,127.80 Close: 5,155.30

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.

CAC Steady After US Markets Recover

The CAC index is showing limited movement in the Tuesday session, after posting small gains on Monday. Currently, the index is at 5,135.50, down 0.09% on the day. On the release front, French French Preliminary Payrolls edged up to 0.3%, beating the forecast of 0.2%. Wednesday should be busier, with key events in Germany and the eurozone. Germany and the eurozone will release GDP reports, and Germany will also publish Final CPI.

After last week’s massive losses, global stock markets have steadied this week. The CAC lost 3.6% last week, and has endured an awful February, shedding 6.9%. Much of the sell-off can be attributed to investor concern over higher inflation in the US, which could lead to raise hikes from the Federal Reserve and other central banks. Inflation has also moved higher in the eurozone, although with plenty of slack in the economy, the ECB is not contemplating any rate hikes.

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

Tuesday (February 13)

  • 2:45 French Preliminary Payrolls. Estimate 0.2%. Actual 0.3%

*All release times are GMT

*Key events are in bold

 

CAC, Tuesday, February 13 at 8:30 EDT

Open: 5,139.50 High: 5,155.50 Low: 5,110.80 Close: 5,135.50

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.

CAC Loses Ground as Global Sell-Off Continues

The CAC index has posted losses in the Friday session. Currently, the index is at 5124.00, down 0.54% on the day. On the release front, French Industrial Production came in at 0.5%, above the estimate of 0.1%.

It’s been a tumultuous week for global stock markets, and the CAC has dropped 3.6% percent this week. February has been dismal for European markets, and the CAC has shed 6.9%. Earlier this  week, the CAC dropped to its lowest level since early September. The CAC has lost ground on Friday, following losses in the North American and Asian stock markets. Ironically, the catalyst for the current sell-off has been solid economic data in the US; namely, improved payrolls and wage growth reports. This has raised concerns of inflation, which could lead to a quicker pace of rate hikes from the Federal Reserve. This sentiment has sent the bond markets higher, while weighing on global stock markets.

A rebound in the global economy has been a boon for eurozone exports, and this has boosted France’s manufacturing setor. This was underscored by a solid French industrial production report, which gained 0.5% in December. We’ll get a look at Eurozone Industrial Production next week. The November reading surged to 1.0%, marking a 3-month high.

After months of intense negotiations, President Angela Merkel appears to have put together a new coalition government. Earlier this week, Merkel’s conservative party and the socialist SDP announced that they had finalized a coalition agreement. In the last government, the SDP was the junior partner of the conservatives, but this time around the SDP has extracted major concessions from Merkel, including the finance and foreign affairs ministries. This could present a unique opportunity for French President Macron, as the new German government will likely undergo a significant shift in its stance towards the eurozone. Under the previous government, there was a reluctance to provide large bailouts to weaker eurozone members, such as Cyprus and Greece. However, struggling members will likely find a sympathetic ear for financial help from the SDP. As well, Macron’s vision of a more integrated Eurozone, complete with a budget and finance minister, may dovetail nicely with the SDP’s stance towards the eurozone.

Hawks coming home to roost

 

Economic Calendar

Friday (February 9)

  • 2:45 French Industrial Production. Estimate 0.1%. Actual 0.5%

*All release times are GMT

*Key events are in bold

CAC, Friday, February 9 at 6:25 EDT

Open: 5,223.90 High: 5,248.50 Low: 5,205.50 Close: 5205.00

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.

CAC Spiral Continues as Market Turbulence Continues

The CAC index has posted considerable losses in the Thursday session. Currently, the index is at 5205.00, down 0.97% on the day. On the release front, there are no data releases on the schedule. On Friday, France releases Industrial Production, which is expected to post a small gain of 0.1%.

It’s been a tumultuous week for global stock markets, and the CAC has dropped 2.3% percent this week. February has been dismal for European assets, and the CAC has shed 5.5% this month. US markets have set the tone, with the Dow Jones posting its biggest one-day loss on Monday. The catalyst for the current turbulence is investor concern that inflation could rise in the US, which in turn would trigger additional rate hikes from the Federal Reserve. This would make dollar-denominated assets more attractive than European assets. US stock markets posted losses on Wednesday, and the downward trend has continued in the European stock markets on Thursday.

As the largest member of the Eurozone, what happens in Germany often has a significant impact on the rest of the eurozone. There is an audible sigh of relief in France and elsewhere, as Germany appears on the verge of forming a new government, after months of negotiations. On Wednesday, the socialist SDP and Angela Merkel’s conservatives announced that they had finalized a coalition agreement. In the last government, the SDP was the junior partner of the conservatives, but this time around the SDP has extracted major concessions from Merkel, notably control of the powerful finance ministry. This will likely mark a shift in Germany’s eurozone policy, which had been marked by a conservative stance under former finance minister Wolfgang Schaeuble. The weaker members of the eurozone, such as Greece, will likely find a more sympathetic ear for financial help from the SDP than they did from Schauble. The coalition agreement still requires the consent of a majority of the 464,000 members of the SDP, but is expected to pass this final hurdle.

Market Jitters Remain/strong

Economic Calendar

Thursday (February 8)

  • 4:00 ECB Economic Bulletin

Friday (February 9)

  • 2:45 French Industrial Production. Estimate 0.1%

*All release times are GMT

*Key events are in bold

 

CAC, Thursday, February 8 at 7:10 EDT

Open: 5,223.90 High: 5,248.50 Low: 5,205.50 Close: 5205.00

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.

CAC Slides on Global Sell-Off

The CAC index has posted sharp losses in the Tuesday session. Currently, the index is at 5141.70, down 2.70% on the day. On the release front, there are no key indicators on the schedule. France’s deficit dropped sharply to EUR 67.8 billion, down from the previous reading of EUR 84.7 billion. This marked a 6-month low. Eurozone Retail PMI dipped to 50.8 in January, down from 53.0 in December. On Wednesday, France releases Trade Balance, which is also expected to show a smaller trade deficit.

Global stock markets are seeing red, and the CAC continues to slide. The index lost 3.1% last week and has declined another 2.9% this week. US markets took a tumble on Monday, with the Dow Jones posting its biggest loss in one day – at one stage, the index was done 1500 points. The Dow fell 4.6% on Monday, and the downward trend has continued in the Asian and European markets on Tuesday. As investors head for the hills, analysts are scrambling to find the reasons behind the massive sell-off. Some experts are pointing to the changing of the guard at the Federal Reserve, with Jerome Powell replacing outgoing chair Janet Yellen on Saturday. However, Powell is not expected to change current monetary policy, so it’s unclear how Powell would have rubbed the markets the wrong way after just one day at his new job.

More likely, the stock markets woes can be attributed to strong US nonfarm payrolls and wage growth reports, which were released on Friday. Investors fear that the sharp data could lead to higher inflation, which in turn would result in more rate hikes this year. Higher interest rates make the dollar more attractive for investors, at the expense of the stock markets. Adding to investors’ concerns, there are expectations that the ECB and possibly the Bank of Japan could raise rates late in 2018, which would push up the euro and yen and weigh on the stock markets.

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The French private sector has started 2018 on high note, as the services sector continues to expand at a brisk pace. January’s Services PMI was strong, as the indicator edged up from 59.1 to 59.2, just shy of the estimate of 59.3 points. Business confidence remains the strongest since 2011, as businesses are optimistic about strong global economic conditions. The manufacturing sector has also showed strong expansion, boosted by global demand for French products.

 

Economic Calendar

Tuesday (February 6)

  • 2:45 French Government Budget Balance. Actual 67.8B
  • 4:10 Eurozone Retail PMI. Actual 50.8

*All release times are GMT

*Key events are in bold

 

CAC, Tuesday, February 6 at 7:20 EDT

Open: 5,118.25 High: 5,224.50 Low: 5,113.50 Close: 5141.70

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.

CAC Slides on US Inflation Concerns

The CAC index is down sharply in the Monday session. Currently, the index is at 5293.90, down 1.32% since the Friday close. On the release front, Eurozone and French Services PMIs improved in January, and both readings beat their estimates. Eurozone retail sales declined 1.1%, matching the forecast. Later in the day, ECB President Mario Draghi testifies on the ECB’s Annual Report for 2016 before the European Parliament. On Tuesday, the Eurozone releases Retail PMI and France publishes the government budget deficit.

It’s been a rough start for the CAC on Monday, as European markets are lower to start off the week. An excellent nonfarm payrolls report in the US has raised concerns of inflation, which the Fed could counter with a series of rate hikes. This in turn would make the dollar more attractive for investors, at the expense of the stock markets.

The CAC had a rough week, losing 3.0% last week. On Friday, Deutsche Bank shares dropped more than 5%, sending European stock markets into red territory, and the DAX is at its lowest level since September 26. The picture for Deutsche Bank is not a pretty one, as the stock price is at its lowest level since November, and the bank posted its third straight annual loss in 2017. A decline in investment bank revenue and the US tax reform bill contributed to a weak fourth quarter for Deutsche Bank shares.

With the eurozone economy continuing to perform well, there has been speculation that the ECB could wind up its asset-purchase program (QE) in September and shift to a normative policy, and perhaps raise interest rates. However, Mario Draghi and other ECB members have taken pains to reiterate that the Bank is in no rush to end QE. Last week, executive board member Benoit Coeure joined the chorus, saying that although QE “will not last forever” policymakers were in agreement “that we have to be patient and prudent because we are not yet where we want to be in terms of inflation”. Investors would be well advised to keep a close eye on eurozone and German inflation numbers, as asset purchases could be extended beyond September if inflation remains well below the ECB target of around 2.0%.

Economic Calendar

Monday (February 5)

  • 3:50 French Final Services PMI. Estimate 59.3. Actual 59.2
  • 4:00 Eurozone Final Services PMI. Estimate 57.6. Actual 58.0
  • 4:30 Eurozone Sentix Investor Confidence. Estimate 33.2. Actual 31.9
  • 5:00 Eurozone Retail Sales. Estimate -1.1%. Actual -1.1%
  • 9:45 Eurozone Final Services. Estimate 53.3
  • 11:00 ECB President Mario Draghi Speaks

Tuesday (February 6)

  • 2:45 French Government Budget Balance
  • 4:10 Eurozone Retail PMI

*All release times are GMT

*Key events are in bold

CAC, Monday, February 5 at 7:40 EDT

Open: 5493.50 High: 5519.75 Low: 5492.30 Close: 5293.90

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.