Menu

Search

  |   Commentary

Menu

  |   Commentary

Search

'Worrying signs for France via CAC 40', shows FxWirePro model

Since the election of Donald Trump, the equity markets around the world have been moving higher on hopes that the fiscal boost promised by President Trump would benefit stocks everywhere and other nations might follow suit. France’s benchmark stock index, CAC40 rose by more than 15 percent since then. However, one of our models is showing signs to worry.

In February last year, one of our models was suggesting that the pound might decline from the then current rate of 168 against the yen to as low as 121 against the yen. We suggested the call to our readers and we hope that they made a killing as the pound declined to as low as 124 against the yen. Undoubtedly, the call seemed to be an outrageous one at the time, it was given out. The very same model is also predicting that France’s benchmark stock index CAC40 will decline to as low as 2320, which is a more than 50 percent decline from the current rate of 4979. Well, this is a quite severe call, and we, as of now are not able to imagine a fundamental scenario which might prompt this call to its target, except for a French exit from the European Union and the Eurozone and that could become a reality if the Front National leader Marine Le Pen wins the French presidency.

The above scenario would negate only if the CAC40 breaks above 5325 mark, We expect the current rally to continue but not move higher beyond 5240.

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.