CAC Steady as Eurozone Investor Report Accelerates

The CAC index is unchanged in the Monday session. Currently, the CAC is trading at 5,360.30, down 0.03% on the day. On the release front, Eurozone Sentix Investor Confidence improved to 29.7, above the estimate of 28.6 points. On Tuesday, France releases Industrial Production, which is expected to remain unchanged at 0.5%.

French President Emmanuel Macron faces a serious challenge on Tuesday, as France braces for a nationwide strike by public service workers, which will affect bus, rail and air transport, hospitals and government offices. The strike has been endorsed by all nine public sector unions, who represent 5.4 million workers. The unions are protesting the government’s plan to dismiss 120,000 public sector workers and reduce sick leave benefits. Macron ran on a campaign of reform, but his plan to trim the bloated public sector has predictably run into strong opposition. The government has already pushed through labor reforms, and says more measures are needed in order to boost the French economy.

What’s next for Catalonia? The region’s parliament meets on Tuesday, and Catalan leader Carles Puigdemont has said that it is up to the Catalan parliament to approve independence, but it’s unclear what path lawmakers will take. Puigdemont has not had any talks with Spanish Prime Minister Mariano Rajoy, as the constitutional crisis continues this week. On Sunday, a demonstration against the referendum attracted some 350,000 people, in a strong show of support for Catalonia remaining in Spain. Under Spain’s constitution, the Spanish government could literally shut down the Catalan parliament, but has hesitated to take such drastic action so far. However, if the Catalan parliament declares independence, Rajoy could respond forcefully. Investors are nervously monitoring the crisis, which could take a toll on the Spanish economy. Last week, two major banks, Caixabank and Sabadell, said they would relocate their corporate headquarters out of Catalonia, and other large companies could follow suit.

Economic Calendar

Monday (October 9)

• 4:30 Eurozone Sentix Investor Confidence. Estimate 28.6. Actual 29.7
• All Day – Eurogroup Meetings

Tuesday (October 10)

• 2:45 French Industrial Production. Estimate 0.5%
• All Day – ECOFIN Meetings

*All release times are EDT

*Key events are in bold

CAC, Monday, October 9 at 8:40 EDT

Open: 5366.50 High: 5380.30 Low: 5352.30 Close: 5358.50

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