French business sentiment index rises in September, GDP likely to grow 0.3 pct in Q3

The Bank of France released the business sentiment survey for September today. The survey implied that sentiment in French manufacturing sector was much stronger at the end of the third quarter, with the relevant index rising 3 points in September to 105, its highest reading for the year so far.

Except the transport sector, output was reportedly firmer throughout key subsectors and new orders increased too. The services and construction activity also recorded strong growth. Confidence in these sectors also rose higher in September, with the services indicator rising to 103 and construction indicator rising to 105.

Therefore, on the whole, the Bank of France considered today’s survey to be in line with French GDP growth of 0.5 percent sequentially in the third quarter, noted Daiwa Capital Market in a research report. Partially, that likely reflects positive payback for the strike-related softness in second quarter.

“But with other sentiment surveys in France - including the INSEE and Markit PMIs - having suggested little, if any, improvement in conditions over the third quarter, for the time being we maintain our less optimistic forecast of a moderate improvement in Q3, with GDP growth up 0.1ppt on Q2 to 0.3%Q/Q”, added Daiwa Capita. Market.

At 17:00 GMT the FxWirePro's Hourly Strength Index of Canadian Dollar was bearish at -78.4991, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 0.394571. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex