CAC Unchanged Ahead of Fed Reserve Minutes

The France CAC 30 is unchanged in the Wednesday session. Early in the North American session, the CAC is trading at 5341.80 points. On the release front, there are no economic releases out of France or the eurozone. The ECB released its semi-annual Financial Stability Review, and the tone was generally positive. ECB President Mario Draghi delivered remarks at an event in Madrid. In the US, today’s highlight is the Federal Reserve minutes from the May policy meeting.

The ECB released its Financial Stability Review on Wednesday, and the report found that financial stress in the euro-area remained at low levels, as there is growing optimism about economic conditions in the eurozone. The review found that there financial market and bank stress indicators remained contained, but noted that “sovereign stress” had risen in 2017, due to greater political uncertainty, such as the triggering of Article 50, whereby Britain gave official notice that it was withdrawing from the EU. Another concern highlighted by the review is that government finances in the eurozone “remain fragile”, and an increase in interest rates could have a negative effect on the fiscal situation of weaker members, such as Italy and Portugal.

The Federal Reserve raised rates back in March, and the markets are expecting the Fed to press the rate trigger again in June. The odds of a rate hike have increased to 83%, according to the CME Group. Just last week, the likelihood of a rate increase stood at 73%. Despite the market speculation, Fed policymakers are keeping their cards close to their chest, at least in their public appearances. On Tuesday, Philadelphia Fed President Patrick Harker said that a June move was a “distinct possibility”, but cautioned that a weak inflation report could delay a rate hike. Earlier in the week, Robert Kaplan, President of the Dallas Fed, stated that three interest increases in 2017 was “appropriate”. The Fed minutes are expected to underscore support for a June move, but may not shed much light on what happens after that. Still any clues about the Fed’s rate plans could shake up the listless EUR/USD.

Economic Calendar

Wednesday (May 24)

• 4:00 ECB Financial Stability Review
• 8:45 ECB President Mario Draghi Speaks
• 14:00 US FOMC Minutes

*All release times are EDT

*Key events are in bold

CAC, Wednesday, May 24 at 8:25 EDT

Open: 5335.50 High: 5352.80 Low: 5326.50 Close: 5341.80

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