The CAC 40 and DAX 40 indices have remained in a tight range in the past few months. CAC 40, which tracks the biggest companies in France, was trading at €7,870, up by 16% from its lowest level this year.
Similarly, the DAX Index was trading at €23,740, also much higher than the year-to-date low of €18,522. This article explores some of the top catalysts for these indices this week.
ECB officials statement
One of the top catalysts for the CAC 40 and DAX Index will be the upcoming speeches by some European Central Bank officials, who will provide investors with an estimate on what to expect in the next meetings.
Some of the top ECB officials to watch will be Philip Lane, the bank’s main economist, and Georg Muller, Martins Kazaks, Piero Cipollone, Pedro Machado, Isabel Schnabel, and Christine Lagarde.
In recent statements, most of these officials have advocated for an interest rate pause, noting that European inflation has dropped to the desired 2% target. A dovish tone by most of these officials will be bullish for the German DAX and French CAC.
European consumer inflation data
The other notable catalyst for the CAC and DAX will be the upcoming flash European consumer inflation data.
Economists polled by Reuters showed that the average estimate is that the headline Consumer Price Index rose from 2% in August to 2.3% in September as it moved further away from the ECB target of 2.0%
Core inflation rate, which excludes the volatile food and energy prices, is expected to remain unchanged at 2.3%.
European inflation has been lower than in the United States because of the stronger euro and the lower natural gas prices.
Recent data shows that the EUR/USD exchange rate has jumped by over 12% from the year-to-date low and analysts anticipate more gains to 1.2000.
There will be other important European macro numbers to watch this week, including the manufacturing and services PMI data and German retail sales.
US non-farm payrolls data
The other notable catalyst for the DAX and the CAC 40 Index is the upcoming US non-farm payrolls data, which will come out on Friday this week.
Economists expect the report to show that the economy created 39,000 jobs in September as the unemployment rate remained unchanged at 4.3%.
The last jobs report showed that the economy added just 22,000 jobs in August, while a revision showed that the economy lost jobs in June.
Therefore, in addition to the official report, these indices will react to the revisions for the previous NFP numbers.
These American numbers have an impact for European indices because of their impact on the Federal Reserve’s monetary policy. A weak jobs report will be bullish for these indices because it will raise the possibility that the Federal Reserve will cut interest rates in the coming meeting.
The other notable catalysts for the German DAX Index are the potential US government shutdown, an announcement of tariffs by Donald Trump, and macro data like the consumer confidence and the JOLTs job vacancies numbers.
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