The CAC index has posted gains in the Monday session. Currently, the index is at 5515.00, up 0.50%. On the release front, France’s trade deficit widened to EUR 5.7 billion, above the forecast of EUR 4.8 billion. This marked the highest trade deficit since August.
Stock markets have jumped out of the gates in 2018, and the CAC has jumped onto the bandwagon, posted strong gains of 3.8% in January. Investors are giving the eurozone economy a thumbs-up, as the bloc is on track for a solid fourth quarter, as growth continues and unemployment falls. Inflation has also moved higher, although the ECB is unlikely to reconsider its current stimulus program, which ends in September.
The political vacuum hasn’t affected the robust German economy, but it has sidelined President Angela Merkel, arguably the head of the eurozone. French President Emmanuel Macron has grandiose plans for the further integration of the eurozone, such as harmonizing corporate tax regimes and establishing a eurozone budget. Merkel would make an ideal partner to reform the bloc, but she can’t lend Macron a helping hand while she leads a caretaker government. Merkel’s conservative bloc is talking with the Social Democrats, but German coalition talks tend to move slowly, and could last for several more months.
