Monday, 10th January
Eurozone Unemployment Rate (Nov)
Tuesday, 11th January
ECB President Lagarde Speaks
FED Chair Powell Testimony
Wednesday, 12th January
Eurozone Industrial Production (MoM) (Nov)
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
It was a bearish end to the week for the European majors on Friday. The DAX30 fell by 0.65%, with the CAC40 and the EuroStoxx600 ending the day down by 0.43% and by 0.47% respectively.
Disappointing economic data from Germany and the U.S weighed on the majors. A further pickup in Eurozone inflationary pressure added to the downside on the day.
Away from the economic calendar, a continued surge in new COVID-19 cases across the region also pegged the majors back. While reports continued to talk of milder symptoms and fewer hospitalizations, an economic impact is to be expected. This was reflected in December’s service PMIs that had been released earlier in the week.
It was a busy Eurozone economic calendar at the end of the week. Key stats included German industrial production and trade data along with Eurozone inflation figures.
The stats were market negative on the day. German industrial production unexpectedly fell by 0.2% versus a forecasted 1.0% increase. Also negative was a narrowing of Germany’s trade surplus from €12.4bn to €10.9bn.
Eurozone inflation figures were also market negative. According to prelim figures, the Eurozone’s annual rate of inflation ticked up from 4.9% to 5.0%. Month-on-month, consumer prices rose by 0.4%, following a 0.4% increase in November. Following the FED’s more hawkish than anticipated FOMC meeting minutes, the latest numbers could force the ECB’s hand…
From the U.S
Nonfarm payrolls for December disappointed on Friday. Falling well short of a forecasted 400k increase, nonfarm payrolls rose by just 199k in December.
While it was a weak number, the U.S unemployment rate fell from 4.2% to 3.9%, supporting a March rate hike.
The Market Movers
For the DAX: It was a bearish day for the auto sector on Friday. Continental and Daimler led the way down, falling by 1.59% and by 1.80% respectively. BMW and Volkswagen saw more modest losses of 0.64% and 0.72% respectively.
It was a bullish day for the banks, however. Deutsche Bank and Commerzbank rose by 1.78% and by 3.50% respectively.
On the DAX30, Delivery Hero was the biggest loser, tumbling by 13.5%.
From the CAC, it was a bullish day for the banks. BNP Paribas gained 0.48%, with Soc Gen and Credit Agricole ending the day up by 1.07% and by 1.01% respectively.
The French auto sector had a mixed session. Stellantis NV fell by 1.34%, while Renault ended the day up by 0.31%.
Air France-KLM found support, rising by 0.59%, while Airbus SE declined by 0.79%
On the VIX Index
It was a 2nd consecutive day in the red for the VIX on Friday, marking a 10th fall in 13 sessions.
Following a 0.61% decline on Thursday, the VIX fell by 4.33% to end the day at 18.76.
The Dow slipped by 0.01%, with the NASDAQ and the S&P500 seeing losses of 0.96% and 0.41% respectively.
The Day Ahead
It’s a quiet day ahead on the Eurozone’s economic calendar. Eurozone unemployment figures are due out in the early part of the European session. With little else for the markets to consider, expect any weak numbers to influence.
From the U.S, there are no major stats for the markets to consider. The lack of stats will leave central bank chatter and COVID-19 news updates to influence later in the day.
In the futures markets, at the time of writing, the Dow Mini was down by 50 points, while the DAX was up by 16 points.
For a look at all of today’s economic events, check out our economic calendar.