The French Blue Chip stock index, the CAC 40 closed down almost 1.6 percent Tuesday, putting it negative for May. The CAC40 closed down 1 percent for the month after Inflation in the Eurozone accelerated to 8.1% in May from 7.4% in April, beating expectations for 7.7%. The CAC in 2021 had its best showing in over 20 years after closing the last day of the year down 0.9% to 7,153. A strong reversal from being down 7.1% in 2020. France’s stocks were the best performing in Europe last year.
Inflation and Growth concerns for France
The French Bourse struggled with news that France’s economy shrank unexpectedly in the first quarter as consumers struggled to cope with surging inflation, official data showed on Tuesday.
The INSEE statistics agency said the euro zone’s second-biggest economy contracted 0.2% in the three months through March from the previous quarter. It had previously estimated gross domestic product flatlined during that period. A breakdown of the data showed consumer spending was weaker than previously estimated, falling 1.5% instead of the earlier 1.3% reading, as households reined in spending on new cars and hotels.
“The latest inflation figures for May in France and other countries confirm the increase we expected and the need for a progressive but resolute monetary policy normalisation,” Bank of France Governor Francois Villeroy de Galhau said.
CAC 40 Highlights
How European and UK Largest Caps Fared in May
European equity close: Last day of month of May
- Stoxx 600 -0.9%
- German DAX -1.4%
- UK FTSE 100 -0.1%
- French CAC -1.6%
- Italy MIB -1.2%
- Spain IBEX -0.9%
On the month:
- Stoxx 600 -1.6%
- German DAX +2.1%
- UK FTSE 100 +0.8%
- French CAC -1.0%
- Italy MIB +1.1%
- Spain IBEX +3.0%
The euro gained 1.7% in the month and the pound 0.2%.
The S&P 500 is on track for a 0.2% decline this month at the European markets close.
In May the EURUSD reversed off the bottom outer channel closing at $1.07356, reversing the lowest closing rate since 2017 two weeks ago. Euro continues to correct in what seems like eternal flags in the channel. We watch if Kijun (pink) testing Tenkan (orange) creates any impulse as EURUSD develops in the channel. Watch 3 waves to see development for continuation. Watch also for impulse off Chikou rebalance. Again, governed by EURGBP and Bund volatility.
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From The TradersCommunity News Desk