The CAC index has started the week with gains. Currently, the CAC is trading at 5,390.55, up 0.34% on the day. On the release front, the sole event on the schedule is Eurozone Consumer Confidence, which is expected to remain at -1 point. On Tuesday, France and the eurozone release Services and Manufacturing PMIs, with the indicators expected to show expansion.
Will Catalonia declare independence this week? The constitutional crisis has now entered its third week. On Saturday, the central government said it was imposing direct rule, invoking Article 155 of the Spanish Constitution. The Spanish Senate is expected to approve the measure on Friday, so all eyes are on the Catalan parliament, which could be dissolved. Madrid is expected to strip Catalan President Carles Puigdemont of his title and powers and take over Catalonia’s local police force. Unsurprisingly, the Catalan government has condemned Madrid and said it will not accept direct rule. The crisis has led to many companies in Catalonia moving their legal headquarters to Madrid, and investors are nervously watching as developments unfold in Spain, which is the eurozone’s fourth largest economy.
With the French economy enjoying the economic rebound seen across the eurozone this year, French stock markets have responded with gains. Currently the CAC is trading at its highest level since May, and the index has gained an impressive 5.3% since September 1. President Macron’s plans to reform the economy have been well-received by investors, and the government seems intent on overhauling labor laws and making France much more competitive, which should continue to boost French stock markets. Recent French indicators have generally looked good, and the markets are expecting strong readings from the services and manufacturing PMIs on Tuesday.
Economic Calendar
Monday (October 22)
- Tentative – Eurozone Consumer Confidence. Estimate -1
Tuesday (October 23)
- 3:00 French Flash Manufacturing PMI. Estimate 56.2
- 3:00 French Flash Services PMI. Estimate 57.0
- 4:00 Eurozone Flash Manufacturing PMI. Estimate 57.9
- 4:00 Eurozone Flash Services PMI. Estimate 55.7
*All release times are GMT
*Key events are in bold
CAC, Monday, October 23 at 8:30 EDT
Open: 5376.80 High: 5366.50 Low: 5409.30 Close: 5395.50
