European Equities: Economic Data and Brexit in Focus

Economic Calendar:

Tuesday, 1st December

Spanish Manufacturing PMI (Nov)

Italian Manufacturing PMI (Nov)

French Manufacturing PMI (Nov) Final

German Manufacturing PMI (Nov) Final

German Unemployment Change (Nov)

German Unemployment Rate (Nov)

Eurozone Manufacturing PMI (Nov) Final

Eurozone Core CPI (YoY) Prelim

Eurozone CPI (MoM) Prelim

Eurozone CPI (YoY) (Nov) Prelim

Wednesday, 2nd December

German Retail Sales (MoM) (Oct)

Spanish Unemployment Change

Eurozone Unemployment Rate (Oct)

Thursday, 3rd December

Spanish Services PMI (Nov)

Italian Services PMI (Nov)

French Services PMI (Nov) Final

German Services PMI (Nov) Final

Eurozone Markit Composite PMI (Nov) Final

Eurozone Services PMI (Nov) Final

Eurozone Retail Sales (MoM) (Oct)

Friday, 4th December

German Factory Orders (MoM) (Oct)

IHS Markit Construction PMI (Nov)

The Majors

It was a bearish end to the month and the start of the week for the European majors on Monday. Coming off the back of a bullish week, the DAX30 and EuroStoxx600 fell by 0.33% and by 0.98% respectively. The CAC40 slid by 1.42%, however, to lead the way down.

On the day, a lack of progress towards Brexit and some profit-taking following an impressive November rebound left the majors in the red.

Inflation figures from the Eurozone and stats from the U.S didn’t help, however, with the stats skewed to the negative.

The Stats

It was a relatively busy day on the Eurozone economic calendar. Prelim November inflation figures for Spain, Italy, and Germany were in focus on the day.

In Spain, consumer prices fell by 0.8% in November, compared with November 2019. In October, consumer prices had also fallen by 0.8%. The harmonized index of consumer prices fell by 0.9%, following a 0.9% decline in October. Economists had forecast a 0.8% decline, year-on-year.

Things were not much better from Italy, with consumer prices falling by 0.1% in November, month-on-month. In October, consumer prices had risen by 0.2%.

From Germany, deflationary pressures saw a marked pickup. Consumer prices slid by 0.8% in November, reversing a 0.1% rise from October. Economists had forecast a 0.7% decline.

From the U.S

Chicago PMI numbers for November and October pending home sales figures also disappointed.

The Chicago PMI fell from 61.1 to 58.2 in November, with pending home sales falling by 1.1% in October. In September, pending home sales had fallen by 2.0%.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Daimler rose by 0.32% to buck the trend on the day. Continental and Volkswagen slid by 2.35% and by 3.27% respectively, however, with BMW seeing a more modest 0.04% loss on the day.

It was also a bearish day for the banks. Deutsche Bank fell by 1.44%, with Commerzbank sliding by 3.38%.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole fell by 1.96% and by 1.93% respectively. Soc Gen slid by 3.70% to lead the way down, however.

It was also a bearish day for the French auto sector. Peugeot fell by 1.13, with Renault sliding by 2.23%.

Air France-KLM also hit reverse, tumbling by 7.34%, with Airbus SE ending the day with a 2.52% loss.

On the VIX Index

It was a 5th consecutive day in the red for the VIX on Monday. Following a 1.93% decline on Friday, the VIX fell by 1.30% to end the day at 20.57.

On Monday, the Dow and S&P500 fell by 0.91% and by 0.46% respectively, with the NASDAQ slipping by 0.06%.

The downside for the VIX came in spite of the losses across the U.S benchmarks, with COVID-19 vaccine hopes weighing.

VIX 011220 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. November Manufacturing PMIs for Italy and Spain, and prelim Eurozone inflation figures for November are due out in the early part of the session.

German unemployment figures and finalized manufacturing PMIs for France, Germany, and the Eurozone are also due out.

Expect Italy, Germany, and the Eurozone’s manufacturing PMIs and Germany’s unemployment figure to have the greatest influence.

From the U.S, the market’s preferred ISM Manufacturing PMI for November will also provide direction late in the session.

Earlier in the day, China’s CAXIN Manufacturing PMI for November will set the tone following impressive NBS numbers on Monday.

Away from the economic calendar, Brexit and COVID-19 news updates will need monitoring. Any progress towards a stimulus package on Capitol Hill would influence.

The Futures

In the futures markets, at the time of writing, the Dow was up by 15 points.

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