Bank of France Business Sentiment Indicator to remain flat in December

Bank of France business sentiment indicator is expected to be unchanged at 98 in spite of both the manufacturing and services PMIs being revised downwards from their flash estimates.

Services PMI fell to an 11-month low of 49.8 while the INSEE confidence indicator was firm at 96 but lower than the long-term average of 100.

"Looking ahead, a weak euro, low oil prices and tax cuts should help boost profit margins. Hence, we see a recovery in business confidence over the next months", says Societe Generale in a research report.
 
But this improvement is likely to be very gradual, as the French business leaders are not convinced that the reform efforts are good enough to drive a sustainable and structural recovery because of the lack of labour market reforms.