CAC Jumps as US Tax Reform Gains Steam

The CAC index has posted strong gains in the Monday session. Currently, the index is at  5412.50, up 1.18% on the day. In economic news,  Eurozone Final CPI improved to 1.5%, matching the forecast. Eurozone Final Core CPI remained unchanged at 0.9%, also matching the estimate.

France released key indicators on Thursday, and the numbers were reflective of positive economic conditions in the eurozone’s second largest economy. The manufacturing and services sectors continue to point to expansion, with readings well above the 50-point level. However, inflation remains a sore point in France, reflective of low inflation levels across the eurozone. In the second half of 2017, French CPI has not cracked above 0.1%, with the exception of the August release. Still, the year is ending on an optimistic note in the eurozone’s second largest economy. Growth has been steady, unemployment is lower, and investor and business confidence has been boosted by the election of pro-business Emmanuel Macron as president. Macron is a strong supporter of pan-Europeanism, and sees an opportunity for France to become a key leader in the EU, with Britain leaving the club in just over a year.

Global stock markets have started the week in green territory, as the Trump tax plan sprints towards the finish line. The Republicans appear on the verge of a major legislative victory, and this has boosted global stock markets on Monday. On Friday, the House of Representatives and the Senate reconciled their tax bills. The uniform bill now goes to both branches, where it is expected pass by a slim margin, as all Democrat lawmakers plan to vote against the bill. Crucially, two Republican senators who were opposed to the bill have now lent their support to the bill. The legislation is the first major overhaul of the US tax code in 30 years, and would represent a massive for President Trump, who has campaigned vigorously for the legislation and wants to sign it into law before Christmas.

Economic Calendar

Monday (December 18)

• 5:00 Eurozone Final CPI. Estimate 1.5%. Actual 1.5%
• 5:00 Eurozone Final Core CPI. Estimate 0.9%. Actual 0.9%

*All release times are GMT

*Key events are in bold

CAC, Monday, December 18 at 7:25 EDT

Open: 5391.30 High: 5423.80 Low: 5389.25 Close: 5412.50

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