The France CAC index has edged higher in the Friday session. Currently, the CAC is trading at 5370.80, up 0.50 percent. On the release front, it’s a quiet day. The eurozone current account surplus came in at EUR 34.1 billion in March. This was lower than the February reading, but beat the estimate of 32.3 billion. Later in the day, we’ll get a look at consumer confidence, which is expected to improve to -3 points.
Global stock markets have suffered losses this week, and the CAC index has dropped 1.9%, largely due to the political turmoil in Washington, which has made investors jittery. The Trump administration has not had much success in damage control, and there is no sign of the political firestorms letting up any time soon. President Trump has endured a rocky start to his term, but last week may have been his worst one of all. The US Justice Department, under strong pressure from Congress, has appointed a former FBI director as a special prosecutor to investigate possible Russian involvement in the US presidential election as well as any connection between Trump and the Russians during the election campaign. President Trump fired back on Thursday, angrily denouncing this move as a “witch hunt”. The media and the Democrats have had a field day with Trump’s troubles, and even Republicans are expressing unease with an administration that appears rudderless and is staggering from crisis to crisis. Trump has been relentlessly dogged by accusations of being cozy with the Russians, and his meeting with the Russian foreign minister last week was a public relations disaster, as the president came under heavy criticism for releasing classified information at the meeting. The latest string of controversies has had a chilling effect on global stock markets, and the downward trend could continue if the crisis in Washington worsens.
The eurozone economy is showing stronger growth, and inflation levels have also picked up. Final CPI for April posted a strong gain of 1.9%, matching the forecast. This was considerably higher than the March gain of 1.5%. Eurozone inflation is once again closing in on the ECB’s target of 2.0%, which could increase pressure on the ECB to consider tapering its ultra-loose monetary policy. However, the ECB seems content to hold course on interest rates and its quantitative easing program, and the central bank will be reluctant to make any moves with key elections coming up in France and Germany.
Economic Calendar
Friday (May 19)
- 4:00 Eurozone Current Account. Estimate 32.3B. Actual 34.1B
- 10:00 Eurozone Consumer Confidence. Estimate -3
*All release times are EDT
*Key events are in bold
CAC, Friday, May 19 at 6:55 EDT
Open: 5301.00 High: 5334.80 Low: 5291.50 Close: 5330.80
