The French stock market continues to have a quiet week. In the Tuesday session, the CAC is trading at 5,327.50 points. On the release front, there are no eurozone events. French indicators were mixed. Preliminary Consumer Spending rebounded in April with a gain of 0.5%, following two declines. This was short of the estimate of 0.8 percent. Preliminary GDP remained unchanged at 0.4 percent in the first quarter, edging above the estimate of 0.3 percent. On Wednesday, the eurozone publishes CPI Flash Estimate and France will release Preliminary CPI.
ECB President Mario Draghi testified before a EU parliamentary committee on Monday, but there were no dramatic statements or hints from the ECB head. Draghi acknowledged that the euro-area economy was improving, but said that inflation and wage growth remained weak, and the ECB would continue its asset-purchase program. The scheme is due to wind up in December, and stronger eurozone numbers had raised speculation that the central bank might revisit its monetary stance and perhaps taper the program at the June policy meeting. However, Draghi appears to be putting the markets on notice that the June policy meeting will be a non-event, and if there are any changes to monetary policy, they will likely be minor in nature.
There were plenty of questions marks about the eurozone economy at the start of 2017. Britain’s vote to leave the European Union stunned and stung Europe, with EU members wondering who would pull out of the club next. The jitters increased as Donald Trump was sworn in as US president, who ran on a protectionist campaign of "America first". Just four months later, skies are looking blue for the euro-area. Although Donald Trump has managed to tussle with German Chancellor Angela Merkel and Brexit remains a serious challenge for the EU, the political and economic landscape has improved considerably. Fears of a populist wave across the continent have receded, as nationalist, anti-EU parties failed to win elections in the Netherlands and France. On the economic front, indicators continue to point upwards, as unemployment has dropped and growth is higher. The EU Spring Forecast has forecast Eurozone GDP to rise 1.7% in 2017 and 1.8% in 2018, with growth in the EU expected at 1.9% for both years. Investors have jumped on the bandwagon, as the CAC has climbed 10.4% since the start of 2017.
