CAC Opens Higher on Renewed Hopes of a Peace Deal, Economic Data Weighs
Zelenskyy back-tracks on stance at White House meeting, opening up to peace talks, the minerals deal and working with the USA.
- Zelenskyy opens up to possibility of peace
- EU commits to seeking more financing for rearming military
- Economic data from France weaker than expected
The CAC opened higher 0.40% on the day but failed to maintain today’s higher and retraced lower. The news of Ukraine president reversing his negative stance on a peace deal giving investor confidence.
Zelenskyy Makes 180 Degree Turn on Peace
The news of the White House fiasco at the meeting between the presidents of the US and Ukraine dampened investor confidence.
And yesterday’s selloff was quickened by the introduction of trade tariffs by the US on Canada, Mexico and China.
This morning the market woke up to the news that Zelenskyy had sent Trump a letter outlining his willingness to cooperate on peace talks.
The exact details of the letter are not known, but the general idea is that Zelenskyy and Ukraine do want peace. The Ukrainian president is willing to work with the US to negotiate a peace deal.
And more interestingly the minerals deal is back on the table. The deal is a way for Ukraine to garner a vested interest from the US in its own security. And will also allow the US to recover the money granted to Ukraine.
CAC Live Chart
Economic Data not So Rosy
Today’s data for Industrial Production saw a decline in activity by 0.6%, when analysts had expected an increase of 0.3%
The surprise drop in economic activity was slightly offset by better than forecast PMI data.
HCOB Services PMI came in at 45.3, while the Composite PMI printed at 45.1. Both numbers were slightly better than forecasts of 44.5 for both.
However, both indices still remain well below the level of 50, which would indicate economic expansion.
ECB Commits Rearming Europe
The EU commissioner announced plans to mobilize up to €800 billion for defense spending.
The commission also announced a proposal to issue bonds for the sum of €150 billion to lend to EU countries for defense spending.
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