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European Equities: Can the Majors Make it 4-in-a-row? The Futures Point to the Red

Economic Calendar:

Thursday, 12th November

German CPI (MoM) (Oct) Final

ECB Economic Bulletin

Eurozone Industrial Production (MoM) (Sep)

Friday, 13th November

ECB President Lagarde Speaks

French CPI (MoM) (Oct) Final

French HICP (MoM) (Oct) Final

Spanish CPI (YoY) (Oct) Final

Spanish HICP (YoY) (Oct) Final

Eurozone GDP (YoY) (Q3) 2nd Estimate

Eurozone Trade Balance (Sep)

The Majors

It was a third consecutive day in the green for the European majors on Wednesday. The EuroStoxx600 rose by 1.08% to lead the way, with the CAC40 and DAX30 gaining 0.48% and 0.40% respectively.

Continued market optimism towards a COVID-19 vaccine and a reopening of economies provided further support.

The upside came in spite of the continued spike in the new COVID-19 case, with Italy joining France and Spain with more than 1m COVID-19 related cases.

On the economic calendar, while there were no stats to consider, ECB President Lagarde also provided support. Lagarde confirmed that further policy easing would take place next month in spite of the rising prospects of a COVID-19 vaccine.

The Stats

It was a particularly quiet day on the Eurozone economic calendar. There were no material stats to provide the European majors with direction on Wednesday.

From the U.S

It was also a quiet day on the economic calendar, with no material stats to provide direction late in the session.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. BMW and Volkswagen rose by 0.72% and by 0.12% respectively. Continental fell by 1.12% following a warning of further reconstruction costs in the current quarter. Daimler saw a more modest 0.28% loss on the day.

It was a bearish day for the banks, however. Deutsche Bank fell by 2.13%, with Commerzbank sliding by 3.52%.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole fell by 2.63% and by 1.04% respectively, with Soc Gen sliding by 3.69%.

It was a mixed day for the French auto sector. Peugeot rose by 0.27%, while Renault fell by 2.07%

Air France-KLM fell by 1.76%, the loss coming in spite of vaccine optimism, with Airbus SE falling by 1.05%.

On the VIX Index

It was another day in the red for the VIX, which logged an 8th day in the red from nine on Wednesday. Following on from a 3.69% decline on Tuesday, the VIX fell by 5.44% to end the day at 23.45.

A rebound in tech stocks and a pickup in the S&P500 delivered the upside on the day. The gains came in spite of a continued surge in new COVID-19 cases, recounts, and Trump’s lawsuits.

For now, the markets are content that the U.S Presidential Election result will not be overturned.

On Wednesday, the NASDAQ and the S&P500 rose by 2.01% and by 0.77% respectively, while the Dow fell by 0.08%.

VIX 12/11/20 Daily Chart

The Day Ahead

It’s a relatively busy day ahead on the Eurozone economic calendar. Key stats from the Eurozone include Germany’s inflation and Eurozone industrial production figures.

Barring particularly dire numbers, however, the stats are unlikely to have a material impact on the majors.

The ECB Economic Bulletin, which is also due out later today, will likely provide some direction, however.

With the 2nd wave of the COVID-19 pandemic hitting parts of the Eurozone, the ECB’s outlook will garner plenty of interest.

From the U.S, October inflation and the weekly jobless claims figures are due out late in the European session.

Expect the jobless claims figures to have the greatest influence on the day.

Away from the economic calendar, Brexit, COVID-19, and U.S politics will remain key drivers.

The Futures

In the futures markets, at the time of writing, the Dow was up by 21 points, while the DAX was down by 32 points.

For a look at all of today’s economic events, check out our economic calendar.