Growing Euro notes arrows over the flag of European Union.

European Equities: ECB Economic Bulletin and Member Chatter in Focus along with U.S Stats

Economic Calendar

Thursday, 13th January

ECB Economic Bulletin

Friday, 14th January

French CPI (MoM) (Dec) Final

French HICP (MoM) (Dec) Final

Spanish CPI (YoY) (Dec) Final

Spanish HICP (YoY) (Dec) Final

Eurozone Trade Balance (Nov)

ECB President Lagarde Speaks

The Majors

It was another bullish day for the European majors on Wednesday. The CAC40 rose by 0.75%, with the DAX30 and the EuroStoxx600 gaining 0.43% and by 0.64% respectively. A 2nd consecutive day in the green reversed the losses from Monday.

Economic data from the Eurozone provided early support, with industrial production up by more than expected. The area of focus on the day, however, was U.S inflation. In December, the U.S annual rate of inflation accelerated to 7.0%, which was the largest increase since June 1982.

In spite of the pickup in inflationary pressure, comments from FED Chair Powell’s testimony resonated on the day. While the FED Chair had talked of the need to lift rates, he had not talked of the need for more than had been projected in the FOMC economic projections.

The Stats

It was another quiet day on the Eurozone economic calendar, with Eurozone industrial production figures in focus.

Industrial Production

In November, Eurozone industrial production increased by 2.3% versus a forecasted 0.5% rise. Production had fallen by 1.3% in October.

According to Eurostat,

  • Production of non-durable consumer goods rose by 3.2%, capital goods by 1.5%, and energy by 1.2%.
  • There was also a 0.9% increase in the production of intermediate goods, while durable consumer goods production fell by 0.2%.
  • By member state, Ireland (+37.3%) recorded the largest monthly increase.
  • Belgium (-4.4%), Malta (-3.7%), and Luxembourg (-2.3%) recorded the largest declines, however.
  • Year-on-year, industrial production was down by 1.5% in the euro area.

From the U.S

Inflation figures were in focus following FED Chair Powell’s testimony on Tuesday.

According to the U.S Bureau of Labor Statistics, consumer prices rose by 0.5% month-on-month versus a forecasted 0.4% rise. Consumer prices had risen by 0.8% in November. More significantly, the core annual rate of inflation accelerated from 4.9% to 5.5%. Economists had forecast a core annual rate of inflation of 5.4%.

Month-on-month, core consumer prices increased by 0.6% versus a forecasted 0.5% rise. In November, core consumer prices had risen by 0.5%.

Increases in the indexes for shelter and for used car and trucks were reportedly the largest contributors to the all-items index. By contrast, the energy index declined, ending an extended series of increases.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Wednesday. Daimler rose by 1.21% to buck the trend on the day. Continental and BMW ended the day down by 1.40% and by 0.58% respectively, with Volkswagen slipping by 0.03%.

It was also a mixed day for the banks. Deutsche Bank fell by 0.73%, while Commerzbank rose by 1.07%.

From the CAC, it was a bullish day for the banks. Credit Agricole rallied 2.15%, with Soc Gen and BNP Paribas ending the day up by 1.31% and by 1.51% respectively.

The French auto sector had another mixed session. Stellantis NV rose by a further 2.08%, while Renault slid by 3.56%.

Air France-KLM fell by 2.21%, while Airbus SE saw modest 0.22% gain on the day.

On the VIX Index

It was a 2nd consecutive day in the red for the VIX on Wednesday.

Following a 5.10% fall on Tuesday, the VIX declined by 4.29% to end the day at 17.62.

The Dow rose by a modest 0.11%, with the NASDAQ and the S&P500 seeing gains of 0.23% and 0.28% respectively.

VIX 130122 Daily Chart

The Day Ahead

It’s a quiet day ahead on the Eurozone’s economic calendar. There are no material stats due out of the Eurozone to provide direction. While there are no stats, the ECB Economic Bulletin will draw interest early in the session. On the monetary policy front, ECB members De Guindos, Hakkarainen, and Elderson are scheduled to speak. The market focus will be on the economy, inflation, and any shift in policy to curb inflation.

Later in the session, U.S wholesale inflation and jobless claims figures will also be key, however.

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