France’s business confidence for September remained steady, with a reading of 96, unchanged from the previous month, according to the latest data released by INSEE.
In the services sector, confidence increased to a reading of 98, up from 96 previously. Meanwhile, industrial confidence slightly decreased, recording a figure of 96, compared to a prior 97.
French Business Confidence
We see the French business confidence holding steady at 96, which remains below its long-term average of 100. This suggests the broader economy is neither expanding nor contracting significantly. For traders, this points towards the CAC 40 index likely remaining within the tight trading range we have seen for most of the third quarter of 2025.
The key detail is the split between a rising services sector, now at 98, and a weakening industrial sector, down to 96. This points to a two-speed economy where consumer-facing businesses are outperforming manufacturers. This divergence creates an opportunity for pairs trades, such as buying calls on service-oriented companies while buying puts on industrial names.
This report provides little reason for the European Central Bank to alter its current wait-and-see policy, especially with Eurozone inflation having moderated to 2.5% earlier this year in 2025. We believe the ECB will hold interest rates steady at its next meeting. Consequently, options strategies on the Euro, such as selling strangles on EUR/USD futures, could be effective to profit from low currency volatility.
Market Implications
The headline number being unchanged from the prior month removes a potential catalyst for a major market shock. Implied volatility on European equities, as measured by indices like the VSTOXX which has fallen over 8% in the last month, may therefore drift lower. Selling VSTOXX futures or writing options on the Euro Stoxx 50 could be a way to capitalize on this expected period of calm.
