European Equities: COVID-19, the EU Summit, and U.S Stats in Focus

Economic Calendar:

Thursday, 19th November

ECB President Lagarde Speaks

Friday, 20th November

German PPI (MoM) (Oct)

Eurozone Consumer Confidence Flash

The Majors

It was a relatively bullish day for the European majors on Wednesday. The CAC40 and the DAX30 both saw gains of 0.52%, with the EuroStoxx600 gaining 0.44%.

The upside on the day came off the back of more positive COVID-19 vaccine news. Pfizer Inc. and BioNTech released their partnered final phase 3 clinical trial results and 2-months of safety data needed to obtain FDA approval.

Following Moderna Inc.’s impressive figures, Pfizer Inc. announced a 95% efficacy rate, aligned with that of Moderna Inc.

While the vaccine news was positive, new cases continued to surge as the winter months hit. With the vaccine likely to take time to become widely available, the upside on the day was therefore somewhat muted.

The Stats

It was a relatively quiet day on the Eurozone economic calendar. Finalized October inflation figures for the Eurozone were in focus.

The Eurozone’s core annual rate of inflation held steady at 0.2%, which was in line with prelim and forecasts. While consumer prices rose by 0.2%, revised up from a prelim 0.1%, consumer prices fell by 0.3% year-on-year.

In September, consumer prices had also fallen by 0.3%, year-on-year, while consumer prices had risen by 0.1% in the month.

The finalized numbers had a muted impact on the European majors, however, which remained focused on COVID-19 news.

From the U.S

It was a busier day on the economic calendar. Key stats included October building permit and housing start figures.

The stats had a muted impact on the majors, however, with the U.S housing sector continuing to perform amidst record-low mortgage rates.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. Daimler rallied by 1.81% to lead the way, with Continental and BMW rising by 0.65% and by 0.27% respectively. Volkswagen bucked the trend on the day, however, with a 0.01% loss.

It was also a mixed day for the banks. Deutsche Bank fell by 0.52%, while Commerzbank rose by 1.97%.

From the CAC, it was a mixed day for the banks, with BNP Paribas and Credit Agricole rising by 0.50% and by 1.16% respectively. Soc Gen bucked the trend, however, with a 0.50% loss.

It was also another bullish day for the French auto sector. Peugeot rose by 0.74%, with Renault rallying by 4.71%.

Air France-KLM closed out the day with a 1.93% gain, while Airbus SE slipped by 0.10%.

On the VIX Index

It was a 2nd consecutive day in the green for the VIX on Tuesday, marking just a 5th daily gain from fifteen. Following a 1.16% gain from Tuesday, the VIX rose by 4.98% to end the day at 23.84.

On Wednesday, the Dow and S&P500 both fell by 1.16%, with the NASDAQ ending the day down by 0.82%.

While positive vaccine updates from Pfizer Inc. and BioNTech provided support, a roll-out of fresh containment measures weighed. In New York City, schools were closed this week in a bid to curb the continued spread of the virus.

VIX 191120 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone economic calendar. There are no material stats to provide the European majors with direction.

From the U.S, Philly FED Manufacturing and the all-important weekly jobless claims figures will influence late in the session.

On the monetary policy front, ECB President Lagarde is scheduled to speak. Any forward guidance on monetary policy will draw interest.

Away from the economic calendar, expect COVID-19 to remain the main area of focus, however. With the Brexit deadline today, any updates from the virtual Brussels EU Summit will also influence. Fisheries remains a key hurdle in spite of numerous rounds of talks.

There have also been reports of budget and COVID-19 Relief Fund disagreement within the EU, which could test support.

The Futures

In the futures markets, at the time of writing, the Dow was down by 17 points, with the DAX down by 102 points.

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