The CAC index is slightly lower in Monday trade. Currently, the index is at 5,113.80, down 0.18% on the day. On the release front, it’s a quiet start to the trading week. Eurozone Sentix Investor Confidence climbed to 28.2, above the forecast of 27.4 points. Eurozone PPI continues to improve, coming in at 0.0%, short of the estimate of 0.1%. On Tuesday, we’ll get a look at French Final Services, Eurozone Revised GDP and Eurozone Retail Sales.
The eurozone economy continues to hum in the second half of 2017, as economic indicators have generally been positive. Investors and analysts continue to give the economy a thumbs-up, as the Sentix Investor Confidence improved to 28.2, pointing to strong optimism. Germany, the largest economy in the bloc, continues to lead the eurozone with robust growth, but France and others have also improved in 2017. Last week, French numbers impressed, as CPI and Consumer Spending rebounded with gains, following declines in the previous release. As well, Preliminary GDP improved to 0.5% in the second quarter.
A stronger eurozone economy has raised questions as to what monetary moves the ECB has planned – will it finally taper its ultra-accommodative monetary policy? The bank’s asset purchases program is scheduled to end in December, and analysts expect the ECB to withdraw stimulus in early 2018. Still, the ECB has not provided much guidance as to its plans. ECB President Mario Draghi was mum on monetary policy at last week’s meeting of central bankers at Jackson Hole, following the lead of Federal Reserve Chair Janet Yellen. However, the ECB head will not get another free pass this week, as the ECB holds its next policy meeting on Thursday. Any discussion about tapering the ECB’s asset purchase program could have a strong effect on European stock markets.
