The CAC index continues to have a quiet week. Currently, the CAC is trading at 5,500.00, up 0.11% on the day. France released key economic data on Tuesday. Flash GDP remained at 0.5% in the third quarter, matching the estimate. The economy has been steady, as consumer spending has improved and business investment remains strong. Consumer Spending rebounded with a gain of 0.9%, beating the estimate of 0.6%. Preliminary CPI improved to 0.1%, matching the forecast. Eurozone data was mixed, as CPI Flash Estimate missed the estimate, while Preliminary Flash GDP beat the forecast. On Wednesday, the Federal Reserve will be in the spotlight, as the FOMC releases its monthly rate statement.
Eurozone indicators were a mix on Tuesday. CPI Flash Estimate edged down to 1.4%, shy of the forecast of 1.5%. Core CPI Flash Estimate dipped to 0.9%, short of the estimate of 1.1%. There was better news from Preliminary Flash GDP, which remained unchanged at 0.6%, above the estimate of 0.5%. On the employment front the unemployment rate head lower, dropping to 8.9%. This is the lowest level since March 2009. The ECB has announced that it will begin tapering its asset purchase program, as the eurozone economy has rebounded in 2017. Still, inflation remains persistently below the ECB’s target of around 2 percent. The asset purchase program has been extended to April 2018, but the ECB could implement an extension if economic data tails off or if inflation fails to move upwards.
The uncertainty and tension remain at fever pitch in Catalonia. The central government has dissolved the Catalan government and parliament, after imposing direct rule on Catalonia. The Catalan government declared independence just before Madrid invoked Article 155 of Spain’s constitution. The Spanish government has drawn up charges of rebellion against Catalan President Carles Puidgemont, but he has skipped town, and is reportedly in Belgium. It remains unclear what Puidgemont will do next – he could request political asylum or even declare a government-in-exile. Elections have been slated for December 21, and two parties from Puidgemont’s coalition have declared they will participate in the election. With Catalans split down the middle on independence, this saga is likely to continue for some time.
