CAC Slump Continues, but Airbus Shines

The CAC continues to lose ground in the Wednesday session. Currently, the CAC is at 5,283.50, down 0.60% on the day. On the release front, the eurozone trade surplus jumped to EUR 25.0 billion, above the estimate of EUR 21.2 billion. French Final CPI posted a weak gain of 0.1%, matching the forecast. The markets are keeping a close eye on US consumer data. CPI is expected to come in at 0.1% and Core CPI at 0.2%. Consumer spending is also expected to post low numbers, with the estimate for Retail Sales at 0.2% and Core Retail Sales at 0.0%. On Thursday, the eurozone release Final CPI.

It’s been a rough November for the CAC, which has plunged 4.5 percent. The index has posted six straight losing sessions and is at its lowest level since September 28. Financial stocks are lower on Wednesday, as BNP Paribas and Societe General have declined 0.87% and 0.81%, respectively. There was a bright spot from Airbus Group, which announced on Wednesday that it had signed an order to sell 430 aircraft to Indigo Partners, for a price of $49.5 billion. This marks the company’s biggest deal in its history, and Airbus shares are up 2.53% on the day.

The heads of central banks met on Tuesday at an ECB event, with a focus on communication with the markets and the public. Federal Reserve Chair Janet Yellen acknowledged that the FOMC committee of 19 members posed problems, as members did not always speak with a unified voice. This led to the markets picking up on differences between policymakers, often leading to market volatility. Yellen admitted that this problem would not be solved anytime soon, saying it was “a work in progress”. To be fair, this is also an issue for the ECB, as the markets have on occasion reacted to comments from individual policymakers regarding monetary policy or quantitative easing.

The eurozone economy received a respectable grade on Tuesday, as Flash GDP for the third quarter came in at 0.6%. The eurozone expanded in Q3 at an annualized rate of 2.5%. Germany’s robust economy has led the way, with annualized growth of 2.8%, but traditional laggards France and Italy have also rebounded in 2017. At the same time, steady growth has failed to boost inflation, which remains well behind the ECB’s target of around 2.0%. German Final CPI underscored the lack of inflation, with a reading of 0.0% in October. As long as inflation remains at low levels, the ECB is unlikely to further adjust its asset purchases program.

Economic Calendar

Wednesday (November 15)

• 2:45 French Final CPI. Estimate 0.1%. Actual 0.1%
• 5:00 Eurozone Trade Balance. Estimate 21.2B
• 8:30 US CPI. Estimate 0.1%
• 8:30 US Core CPI. Estimate 0.2%
• 8:30 US Retail Sales. Estimate 0.2%
• 8:30 US Core Retail Sales. Estimate 0.0%

Thursday (November 16)

• 5:00 Eurozone Final CPI. Estimate 1.4%

*All release times are GMT

*Key events are in bold

CAC, Wednesday, November 15 at 6:25 EDT

Open: 5303.30 High: 5314.50 Low: 5280.50 Close: 5283.50

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