The CAC index is unchanged in the Tuesday session. Currently, the CAC is trading at 5,360.50, down 0.12% on the day. On the release front, there are no major events on the schedule. French Industrial Production declined 0.3%, missing the forecast of a 04% gain. This marked the indicator’s second decline in three months.
France’s powerful unions have declared a countrywide strike on Tuesday, in protest of the government’s plans to dismiss 120,000 public sector workers and reduce sick leave benefits. Millions of French workers are expected to stay home, and the strike represents a serious challenge to the French President Emmanuel Macron’s plans to reform the economy and trim the public sector. The French economy has rebounded in 2017, but the government says that more reforms are needed in order to make the French economy more competitive.
What’s next for Catalonia? Later on Tuesday, Catalan President Carles Puigdemont will address the Catalan parliament, but it’s not clear whether lawmakers will endorse a declaration of independence from Spain. Catalonians voted in favor of independence in a referendum last week, but the national government has refused to negotiate with the Puigdemont about session.
Pro-independence lawmakers had hoped for international intervention, but the European Union has refused to mediate the crisis, and France as well as other countries have said they will not recognize an independent Catalonia. On Sunday, a demonstration against the referendum attracted some 350,000 people, in a show of support for the Spanish government.
If Puigdemont declares independence, Spanish Prime Minister Mariano Rajoy has promised to take drastic action, which could include dissolving the Catalan parliament and even arresting lawmakers. Investors are casting a nervous eye on the economic ramifications of the crisis. Two major banks, Caixabank (MC:CABK) and Sabadell (MC:SABE), as well as several large corporations, have announced they are relocating their legal headquarters from Barcelona to Madrid.
The tensions have not affected European stock markets so far, but that could change if Catalonia defies Madrid and declares independence.
Economic Calendar
Tuesday (October 10)
- 2:45 French Industrial Production. Estimate +0.4%. Actual -0.3%
- All Day – ECOFIN Meetings
*All release times are EDT
*Key events are in bold
CAC, Tuesday, October 10 at 7:50 EDT
Open: 5362.50 High: 5372.80 Low: 5350.50 Close: 5359.50
