The CAC index is unchanged on the Thursday session. Currently, the index is at 5,218.30, up 0.01% on the day. On the release front, there are no major eurozone events. French Final CPI rebounded in August with a gain of 0.5%, matching the estimate. On Friday, the Eurozone surplus is expected to drop to EUR 20.1 billion.
The French economy continues to improve, and received a thumbs-up from the OECD, which released a report on the French economy on Thursday. The OECD is forecasting growth of 1.7% in 2017, compared to a 1.1% gain in 2016. The report commended President Emmanuel Macron’s agenda to reform the economy, but emphasized that the government needed to cut public sector spending, which is the highest in the 35- member OECD. The report also called on the French government to overhaul the country’s labor laws, including cutting pension costs and raising the current retirement age of 62 years. With President Emmanuel Macron declaring he will reform France’s labor laws, powerful trade unions are mobilizing to fight back. On Tuesday, some 200,000 trade unionists came out for a mass protest. The government plans to adopt new labor rules on September 22, and two large unions have threatened to respond with a massive truckers strike on September 25, which could cause chaos across the country.
Germany goes to the polls on September 24, and France is hoping that a widely expected Angela Merkel win could lead to a more unified eurozone. President Macron plans to unveil a proposal to reform the eurozone, which would include a eurozone finance minister that would be in charge of a eurozone budget. Macron’s call for greater cooperation is linked to Britain’s exit from the EU, which could lead to divisions among the remaining 27 members in the bloc. Macron’s ambitious plan will need Germany’s support before it can become a reality. Will Germany embrace the idea? Angela Merkel’s position has said she is open to the idea, but on Wednesday, Jean-Claude Juckner, head of the European Commission, dismissed the plan, saying he favored a finance minister for the EU but was against a separate eurozone budget and finance minister.