CAC Unchanged Ahead of Eurozone, French Manufacturing PMIs

It’s a quiet start to the week for European stock markets, and the France CAC 30 is almost unchanged. In the North American session, the CAC is trading at 5329.90 points. There are no French or Eurorozone economic releases on the schedule. On Tuesday, we’ll get a look at eurozone and French Manufacturing and Services PMIs.

The continuing political crisis in Washington weighed on global stock markets. The CAC dropped 1.4% last week, as nervous investors have dumped US-denominated assets, boosting the euro, the Japanese yen and gold. Will the downward spiral in the stock markets continue? Much will depend on whether the beleaguered Trump administration can regain its footing after a week to forget. Trump’s administration was rocked by reports that he had asked former FBI director James Comey to end an investigation into connections between Russia and the Trump campaign team during the US election. If these accusations are true, Trump could be charged with committing obstruction of justice. Trump is no doubt delighted to have left town as he wings through the Middle East and Europe, to warm receptions everywhere he goes. With Democrats smelling a bona fide scandal and the noxious term of “impeachment” being thrown around, Trump may face a chilly reception in Congress when he returns from his trip abroad.

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EU finance ministers are meeting on Monday, with debt relief for Greece a key issue on the agenda. Greece has undergone a severe austerity plan and understandably, the Greek government is reluctant to adopt further painful measures. However, Greece could be headed on a collision course with the EU, if the latter insists that the further reforms are needed. German Finance Minister Wolfgang Schaeuble praised the reforms implemented by Greece as “remarkable”, but insisted that Greece must take further steps before the EU provides further financial aid. Greek’s debt woes once resulted in the country almost leaving the eurozone, and if the EU holds up debt relief, European stock markets could drop sharply.

Economic Calendar

Monday (May 23)

• All Day – Eurogroup Meetings

Tuesday (May 24)

• 3:00 French Flash Manufacturing PMI. Estimate 55.2
• 300 French Flash Services PMI. Estimate 56.8
• 4:00 Eurozone Flash Manufacturing PMI. Estimate 56.5
• 4:00 Eurozone Flash Services PMI. Estimate 56.5

*All release times are EDT

*Key events are in bold

CAC, Monday, May 22 at 11:55 EDT

Open: 5334.80 High: 5342.00 Low: 5314.50 Close: 5329.90

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