In July, business confidence in France remained steady at 96, but employment indicators dropped from June.
by VT Markets
/
Jul 24, 2025
France’s business confidence stayed steady in July 2025, according to INSEE. The overall index remained at 96, the same as the month before. The manufacturing confidence index also held at 96, although its previous number was revised from 96 to 97.
Likewise, the services confidence index remained stable at 96. However, the employment indicator dropped. It went down to 96.7 in July from 98.3 in June, showing lower job expectations.
Economic Outlook
Recent data from France suggests a stagnant economy, leading traders to take a cautious or pessimistic view. Now might be a good time to consider buying protective puts on the CAC 40 index. This could safeguard against a possible downturn caused by ongoing weak sentiment.
The drop in the employment indicator raises concerns, indicating that companies are reducing hiring. This trend often signals a slowdown, similar to how France’s manufacturing PMI has been in the contraction range for most of the past year, recently hitting a low of 46.4. Therefore, we would take a cautious approach to French industrial and cyclical stocks in our portfolios.
Investment Strategies
While confidence remains steady at a low point, we do not anticipate a sudden market crash. Instead, we expect a slow decline or trading within a range. A bear call spread on the main index could be a useful way to profit from these sideways-to-negative price movements. This approach limits risk while taking advantage of the lack of upward momentum.
Weak data from the Eurozone’s second-largest economy will likely put pressure on the single currency. Historically, during times of reduced business confidence in France and Germany, like the 2019 slowdown, the EUR/USD exchange rate faced significant downward pressure. We see an opportunity to short the Euro or buy puts on currency futures, especially if this affects the European Central Bank’s stance, leading to a more dovish approach.
Create your live VT Markets account and start trading now.
by VT Markets
Jul 24, 2025
Insights 
VT 
