CAC Unchanged As Tight French Election Looms
MarketPulse | Apr 19, 2017 08:34AM ET
The CAC 40 continues to hug the 5000 line, as the index is trading at 5,006.36 in Wednesday trade. On the release front, Eurozone Final CPI came in at 1.5%, matching the forecast. The Eurozone trade surplus jumped to EUR 19.2 billion, above the estimate of EUR 18.6 billion. On Thursday, we’ll get a look at Eurozone Consumer Confidence.
Eurozone consumer inflation softened in March, but matched the forecast. Final CPI slipped to 1.5%, compared to 2.0% a month earlier. The indicator had been steadily rising, and climbed to 2.0% in February, which is the ECB’s inflation target. This had led to speculation that the ECB might have to consider tightening its monetary policy, either by lowering interest rates or tapering its asset-purchase program (QE). The ECB’s asset-purchase program is scheduled to remain in place until December, although the central bank could opt to bring up that date or taper QE if growth and inflation numbers in the Eurozone are unexpectedly strong. There are also political considerations at play, as the ECB is reluctant to make any significant monetary moves with upcoming elections in France and Germany.
France goes to the polls April 23 in the first round of the presidential election. A opinion poll on Wednesday shows an extremely close race, with centrist Emmanuel Macron at 23% and far-right candidate Marine Le Pen at 22.5%. They are closely followed by center-right Francois Fillon at 19.5% and far-left Jean-Luc Melenchon at 19 percent. France goes to the ballot box on April 23 in the first round of the presidential election. Both Le Pen and Melenchon are running on an anti-EU platform, so investors remain nervous ahead of the vote. Macron is expected to win decisively over Le Pen, should the two candidates face off in the second round in May.
The Federal Reserve has broadly hinted that it plans two more rate hikes in 2017. There have been calls from some Fed policymakers to raise rates three more times, but this seems unlikely, given disappointing retail sales and CPI numbers in March. These weak numbers are likely to make the Fed more dovish, and prompted the Atlanta and New York Federal Reserve banks to lower their outlook for US economic growth for the first quarter of 2017. The Fed can point to a labor market that is close to capacity as well as strong consumer confidence, but this has not translated into stronger consumer spending, a key driver of economic growth. What can we expect next from the Fed? The odds of a rate hike in June are currently priced at 55%, according to the CME Group, down from 65% earlier in April.
Economic Calendar
Wednesday (April 19)
- 8:00 Italian Trade Balance. Estimate 2.24B. Actual 1.88B
- 9:00 Eurozone Final CPI. Estimate 1.5%. Actual 1.5%
- 9:00 Eurozone Final Core CPI. Estimate 0.7%. Actual 0.7%
- 9:00 Eurozone Trade Balance. Estimate 18.6B. Actual 19.2B
- Tentative – German 30-y Bond Auction
Get The News You Want
Thursday (April 20)
- 14:00 Eurozone Consumer Confidence. Estimate -5
*All release times are EST
*Key events are in bold
CAC, Wednesday, April 19 at 8:00 EST
Open: 4988.80 High: 5010.80 Low: 4980.30 Close: 5006.30
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.