European Equities: Economic Data from China to Set the Tone ahead of the European Open

Economic Calendar

Monday, 17th January

Italy CPI (MoM) (Dec) Final

Tuesday, 18th January

German ZEW Current Conditions (Jan)

German ZEW Economic Sentiment (Jan)

Eurozone ZEW Economic Sentiment (Jan)

Wednesday, 19th January

German CPI (MoM) (Dec) Final

Thursday, 20th January

German PPI (MoM) (Dec)

Eurozone Core CPI (YoY) (Dec) Final

Eurozone CPI (YoY) (Dec) Final

Eurozone CPI (MoM) (Dec) Final

The Majors

It was a bearish end to the week for the European majors on Friday. The EuroStoxx600 slid by 1.01%, with the CAC40 and the DAX30 ending the day with losses of 0.81% and by 0.93% respectively.

Following some particularly hawkish chatter from FOMC members on Thursday, disappointing economic data from the Eurozone and the U.S weighed. Adding to the bearish mood was a negative outlook from JPMorgan Chase. Corporate earnings results from the U.S. Citi, JPMorgan Chase, and Wells Fargo were due out on the day.

Ahead of the European open, economic data from China had been upbeat but not enough to support the majors throughout the session.

In December, China’s USD trade surplus widened from $71.71bn to $94.46bn, with exports up 20.9% year-on-year.

The Stats

It was a busier day on the Eurozone economic calendar. Finalized inflation figures for France and Spain were in focus along with trade data for the Eurozone.

French inflation

France’s annual rate of inflation held steady at 2.8% in December, which was in line with prelim figures.

Month-on-month, consumer prices increased by 0.2% after having risen by 0.4% in November, which was in line with prelim figures.

According to Insee.fr,

  • Energy prices fell by 0.9%, month-on-month, after having risen by 1.5% in November.
  • The prices of services were up 0.4% versus 0.2% in November and food prices were up 0.5% versus 0.4% in the month prior.
  • Year-on-year, core inflation was up 2.0%, however, which was up from 1.7% in November.
    • Prices for manufactured goods were up 1.2% versus 0.8% in November.
    • Food prices rose by 1.4% after a 0.5% in November.

Spanish Inflation

Spain’s annual rate of inflation accelerated from 5.5% to 6.5%, which was down from a prelim 6.7%.

Eurozone Trade

In November, the Eurozone’s goods trade balance narrowed from €3.3bn surplus to €1.5bn deficit versus a forecasted €7.6bn surplus.

According to Eurostat,

  • Euro area exports of goods to the rest of the world increased by 14.4% to €225.1bn, compared with Nov-2020.
  • Imports from the rest of the world were up 32% to €226.6bn, compared with Nov-2020.
  • The rise in imports was as a result of an increase in the value of energy imports.
  • In Nov-2020, the Eurozone had a €25bn surplus.
  • The last time the Eurozone recorded a deficit was in Jan-2014.
  • Intra-euro area trade rose to €204.3bn in Nov-2021, up by 22.1% compared with Nov-2020.

From the U.S

Retail sales and consumer sentiment figures were the key U.S stats of the day, with the stats skewed to the negative.

In December, U.S core retail sales slid by 2.3% versus a forecasted 0.2% rise. Core retail sales had risen by just 0.1% in November. Retail sales fell by 1.9% versus a forecasted 0.1% decline. In November, retail sales had risen by 0.2%.

According to prelim figures, the Michigan Consumer Sentiment Index fell from 70.6 to 68.8% in January. Economists had forecast a fall to 70.0. The Consumer Expectations Index slid from 68.3 to 65.9.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. Continental and Daimler fell by 0.14% and by 0.85% respectively. BMW and Volkswagen ended the day up by 0.30% and by 1.60% respectively.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 2.02% and by 1.51% respectively.

From the CAC, it was also a bearish day for the banks. Soc Gen slipped by 0.03%, with Credit Agricole and BNP Paribas seeing losses of 0.86% and 0.99% respectively.

The French auto sector had a bearish session. Stellantis NV and Renault ended the day down by 0.19% and by 1.00% respectively.

Air France-KLM fell by 1.49%, while Airbus SE ended the day up by 0.03%.

On the VIX Index

It was back into the red for the VIX on Friday, marking a 3rd loss of the week.

Partially reversing a 15.27% surge from Thursday, the VIX fell by 5.51% to end the day at 19.19.

The Dow fell by 0.56%, while the NASDAQ and the S&P500 saw gains of 0.59% and 0.08% respectively.

VIX 170122 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone’s economic calendar. Finalized December inflation figures from Italy will be in focus. Barring any marked revisions from prelim figures, however, the stats should have a muted impact on the majors.

Ahead of the European open, 4th quarter GDP numbers from China will set the tone. Other stats from China later this morning will include fixed asset investment, industrial production, and retail sales figures. Expect some interest in the industrial production figures.

With the U.S markets closed today, there are no stats from the U.S to influence late in the European session.

The Week Ahead – Earnings, Central Bank Chatter and a Busy Economic Calendar in Focus

On the Macro

It’s a busy week ahead on the economic calendar, with 63 stats in focus in the week ending 21st January. In the week prior, 44 stats had been in focus.

For the Dollar:

Key stats include Philly FED Manufacturing and initial jobless claims due out on Thursday.

Other stats include NY Empire State Manufacturing and housing sector data. These stats should have a muted impact on the markets, however.

In the week ending 14th January, the Dollar Spot Index fell by 0.58% to 95.165.

For the EUR:

ZEW Economic Sentiment figures for Germany and the Eurozone will be the key stats early in the week.

Finalized December inflation figures for member states and the Eurozone in the week will also draw interest.

At the end of the week, however, expect Eurozone consumer confidence figures to also influence. The markets will be looking for the effects of rising consumer prices on sentiment.

On the monetary policy front, the ECB monetary policy meeting minutes are due out on Thursday, with ECB President Lagarde scheduled to speak on Friday.

For the week, the EUR rose by 0.44% to $1.1411.

For the Pound:

It’s an important week ahead on the economic calendar.

On Tuesday, claimant counts and the UK’s unemployment rate will be in focus.

Inflation and retail sales figures due out on Wednesday and Thursday will also be key, however.

The stats through the week should give the BoE the numbers it needs to decide what’s next on the policy front.

On the monetary policy front, BoE Gov. Bailey is scheduled to speak on Wednesday.

The Pound rose by 0.64% to end the week at $1.3675.

For the Loonie:

It’s a relatively quiet week ahead on the economic calendar.

Inflation figures will be in focus on Tuesday, ahead of retail sales and employment figures on Friday.

With the markets expecting a hawkish BoC, this week’s stats could seal the fate of the Loonie near-term.

The Loonie ended the week up 0.72% to C$1.2552 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

Westpac consumer sentiment and employment figures will be in focus. While consumer sentiment is important, expect the employment numbers to be key. Another sharp pickup in hiring could force the RBA to reconsider its current stance on cash rates.

The Aussie Dollar rose by 0.36% to $0.7207.

For the Kiwi Dollar:

Business confidence figures for the 4th quarter get things started on Tuesday. We have seen business confidence wane recently, so the markets will be expecting some weak numbers.

Of greater significance will be electronic card retail sales figures due out on Wednesday.

At the end of the week, Business PMI numbers will also draw interest, however.

The Kiwi Dollar ended the week up by 0.37% to $0.6804.

For the Japanese Yen:

It’s a relatively quiet week ahead. Key stats are limited to trade data on Thursday and inflation figures on Friday. We don’t expect the numbers to move the dial, however.

On Tuesday, the BoJ also delivers its first monetary policy decision of the year. No surprises are expected…

The Japanese Yen rallied by 1.19% to ¥114.190 against the U.S Dollar.

Out of China

It’s a big week, with 4th quarter GDP numbers due out on Monday. Expect the numbers to set the tone for the week. Disappointing growth figures could bring into question market optimism towards the global economic outlook.

Other stats on Monday include fixed asset investments, industrial production, and retail sales figures. Barring dire numbers, however, these should have a limited impact on the markets.

On the monetary policy front, the PBoC will also be setting loan prime rates on Thursday.

The Chinese Yuan ended the week up by 0.39% to CNY6.3528 against the U.S Dollar.

Geo-Politics

Nothing new to consider in the week ahead, with China and Capitol Hill and Russia continuing to be the key areas of focus.

COVID-19

COVID-19 news updates will remain a key area focus. Risk aversion could hit should a new strain of the virus appear in a developed economy.

Corporate Earnings

It’s also corporate earnings season, with a number of big names releasing results that could test support for riskier assets.

European Equities: A Week in Review – 14/01/22

The Majors

It was a bearish week for the European majors in the week ending 14th January.

The DAX30 slipped by 0.40%, with both the CAC40 and EuroStoxx600 the ending the week down by 1.05% respectively.

It was a choppy week for the global equity markets, with market sentiment towards FED monetary policy the key driver in the week.

Early in the week, FED Chair Powell testimony had pointed to just 3 rate hikes for the year to curb inflationary pressure. December inflation figures from the U.S on Wednesday, however, left FOMC hawks to take a more hawkish stance later in the week.

A number of FOMC members talked of the need for 4 rate hikes, leading to a tech sell-off late in the U.S session on Thursday. The negative sentiment filtered through to the European majors on Friday, leaving the majors in the red for the week.

Economic data from the Eurozone largely took a back seat in the week.

The Stats

Key stats included Eurozone unemployment, industrial production, and trade data for November.

The stats were skewed to the positive. The Eurozone’s unemployment rate fell from 7.3% to 7.2%, with industrial production up 2.3% in the month. Production had fallen by 1.3% in October.

Trade data was market negative, however, while finalized inflation figures for France and Spain had a muted impact on the majors. The Eurozone’s trade balance narrowed from a €3.3bn surplus to a €1.5bn deficit in November. It was the Eurozone’s first goods trade deficit since January 2014.

From the ECB, the Economic Bulletin sent mixed signals, while suggesting that inflation was more than just transitory.

From the U.S

It was a big week for the Dollar. In the first half of the week, FED Chair Powell testimony and December inflation figures were key drivers.

While the FED Chair talked of the need to hike rates, there was no mention of the need for more than 3 this year. This was taken as a positive for the riskier assets and negative for the Dollar.

On Wednesday, another spike in inflation failed to spook the markets. This was in spite of the U.S annual rate of inflation at its highest since 1982. An easing in energy prices for the first time since the uptrend was taken as a sign of a possible topping out.

Jobless claims failed to impress on Thursday, with initial jobless claims increasing from 207k to 230k in the week ending 7th January.

Retail sales figures for December wrapped things up on Friday. In December, retail sales fell by 1.9% versus a forecasted 0.1% decline. Core retail sales tumbled by 2.3% versus a forecasted 0.2% rise.

The Market Movers

From the DAX, it was a mixed week for the auto sector. BMW and Volkswagen rallied by 3.89% and by 2.86% respectively to lead the way, with Daimler rising by 1.67%. Continental bucked the trend, however, with a 0.04% loss.

It was a bearish week for the banking sector. Deutsche Bank and Commerzbank slid by 3.33% and by 5.47% respectively.

From the CAC, it was a bullish week for the banks. Soc Gen rallied by 3.13%, with BNP Paribas and Credit Agricole ending the week with gains of 2.79% and 2.38% respectively.

The French auto sector also had a bullish week. Stellantis NV and Renault rallied by 5.43% and by 4.03% respectively.

Air France-KLM ended the week down by 1.65%, with Airbus falling by 0.31%.

On the VIX Index

It was a 2nd consecutive week the green for the VIX in the week ending 14th January, marking a 6th rise in 9-weeks.

Following an 8.94% gain from the previous week, the VIX rose by 2.29% to end the week at 19.18.

2-days in the green from 5 sessions, which included a FOMC member driven 15.28% jump on Thursday, delivered the upside.

For the week, the Dow fell by 0.88%, with the NASDAQ and the S&P500 ending the week down by 0.28% and by 0.30% respectively.

VIX 150122 Weekly Chart

The Week Ahead

It’s quieter week ahead on the Eurozone economic calendar. Early in the week, ZEW Economic Sentiment figures for Germany and the Eurozone will be in focus. We’ve seen plenty of sensitivity to the numbers of late.

The focus will then shift to finalized inflation figures for member states and the Eurozone and Eurozone consumer confidence figures.

On the monetary policy front, the ECB monetary policy meeting minutes will also draw plenty of interest. The markets are expecting to see a shift in stance on interest rates to curb inflation.

From the U.S, Philly FED Manufacturing and weekly jobless claims figures will be the key stats of the week. Expect another jump in jobless claims to test support for riskier assets…

Ahead of the European open on Monday, economic data from China will set the tone, however, 4th Quarter GDP numbers, along with industrial production and retail sales figures for December will be key.

Away from the Economic Calendar

News updates on COVID-19 will need continued monitoring. While the markets have accepted the less severe Omicron strain, any news of a new strain would weigh on the majors. There are also corporate earnings to draw attention in the week.

The Weekly Wrap – U.S Inflation and FED Commentary Delivered a Choppy Week for the Markets

The Stats

It was a quieter week on the economic calendar, in the week ending 14th January.

A total of 44 stats were monitored, which was down from 63 stats in the week prior.

Of the 44 stats, 19 came in ahead forecasts, with 19 economic indicators coming up short of forecasts. 6 stats were in line with forecasts in the week.

Looking at the numbers, 19 of the stats reflected an upward trend from previous figures. Of the remaining 25 stats, 23 reflected a deterioration from previous.

For the Greenback, it was back into the red. In the week ending 14th January, the Dollar Spot Index fell by 0.58% to end the week at 95.167. A 0.65% slide on Wednesday did most of the damage as the markets responded to U.S inflation figures. In the week prior, the Index had risen by 0.07% to 95.739.

Out of the U.S

It was a big week for the Dollar. In the first half of the week, FED Chair Powell testimony and December inflation figures were key drivers.

While the FED Chair talked of the need to hike rates, there was no mention of the need for more than 3 this year. This was taken as a positive for the riskier assets and negative for the Dollar.

On Wednesday, another spike in inflation failed to spook the markets. This was in spite of the U.S annual rate of inflation at its highest since 1982. An easing in energy prices for the first time since the uptrend was taken as a sign of a possible topping out.

Jobless claims failed to impress on Thursday, with initial jobless claims increasing from 207k to 230k in the week ending 7th January.

Retail sales figures for December wrapped things up on Friday. In December, retail sales fell by 1.9% versus a forecasted 0.1% decline. Core retail sales tumbled by 2.3% versus a forecasted 0.2% rise.

Out of the UK

Retail sales were in focus early in the week. In December, the BRC Retail Sales Monitor was up 0.6% year-on-year versus a forecasted 0.3% increase. In November, retail sales had been up by 1.8%.

More significantly, however, were manufacturing production and GDP numbers at the end of the week.

The stats were skewed to the positive, supporting the more hawkish outlook on BoE monetary policy.

Manufacturing production rose by 1.1% in November versus a forecasted 0.2%. In October, manufacturing production had risen by 0.1%.

Month-on-month, the economy grew by 0.9% in November, following 0.2% growth in October, which was also Pound positive.

In the week, the Pound rose by 0.64% to end the week at $1.3675 In the week prior, the Pound had risen by 0.41% to $1.3588.

The FTSE100 ended the week up by 0.77% following a 1.36% gain from the previous week.

Out of the Eurozone

Key stats included Eurozone unemployment, industrial production, and trade data for November.

The stats were skewed to the positive. The Eurozone’s unemployment rate fell from 7.3% to 7.2%, with industrial production up 2.3% in the month. Production had fallen by 1.3% in October.

Trade data was EUR negative, however, while finalized inflation figures for France and Spain had a muted impact on the EUR. The Eurozone’s trade balance narrowed from a €3.3bn surplus to a €1.5bn deficit in November. It was the Eurozone’s first goods trade deficit since January 2014.

From the ECB, the Economic Bulletin sent mixed signals, while suggesting that inflation was more than just transitory.

For the week, the EUR rose by 0.44% to $1.1411. In the week prior, the EUR had fallen by 0.08% to $1.1361.

The DAX30 slipped by 0.40%, with both the CAC40 and the EuroStoxx600 ending the week down by 1.05% respectively.

For the Loonie

There were no material stats for the markets to consider. The lack of stats left market sentiment towards BoC monetary policy to influence, with the markets expectations of an imminent move delivering support.

An upswing in crude oil prices in the week was also Loonie positive.

In the week ending 14th January, the Loonie rallied by 0.72% to C$1.2552 against the Greenback. In the week prior, the Loonie had fallen by 0.05% to C$1.2643.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

The Aussie Dollar rose by 0.36% to $0.7207, with the Kiwi Dollar gaining 0.37% to end the week at $0.6804. A Friday sell-off limited the upside for the week.

For the Aussie Dollar

Retail sales and trade data were in focus, which delivered mixed results.

Key, however, was a 7.3% jump in retail sales in November versus a forecasted 3.9% increase. In October, retail sales had risen by 4.9%.

Australia’s trade surplus narrowed from A$11.22bn to A$9.423bn in November. Economists had forecasted a surplus of A$10.60bn.

For the Kiwi Dollar

Economic data was limited to building consents, which had a muted impact on the Kiwi Dollar in the week.

For the Japanese Yen

There were no material stats to provide the Yen with direction in the week.

The Japanese Yen rallied by 1.19% to ¥114.190 against the U.S Dollar. In the week prior, the Yen had fallen by 0.42% to ¥115.560.

Out of China

It was a relatively busy week on the economic data front. Inflation and trade data were in focus in the week.

In December, inflationary pressures eased, with China’s annual rate of inflation softening from 2.3% to 1.5%. China’s annual wholesale rate of inflation softened from 12.9% to 10.3%. These were positive for riskier assets, however.

Trade data was upbeat for December. China’s USD trade surplus widened from $71.72bn to $94.46bn. Exports were up 20.9% year-on-year, while imports increased by 19.5%. Exports been up by 22.0% and imports up by 31.7% in November.

In the week ending 14th January, the Chinese Yuan rose by 0.39% to CNY6.3528. In the week prior, the Yuan had ended the week down by 0.34% to CNY6.3778.

The Hang Seng Index ended the week up by 3.79%, while the CSI300 slid by 1.98%.

European Equities: Economic Data, ECB President Lagarde, and U.S Earnings in Focus

Economic Calendar

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 a mixed day for the European majors on Thursday. The DAX30 rose by 0.13%, while the CAC40 and the EuroStoxx600 ended the day with losses of 0.50% and by 0.05% respectively. It was a 3rd consecutive day in the green for the DAX30.

From the Eurozone, the ECB’s Economic Bulletin delivered more uncertainty following the latest spike in U.S inflation. Upward revisions to inflation and downward revisions to growth forecasts were market negative.

Economic data from the U.S also disappointed, with jobless claims unexpectedly rising in the week ending 7th January.

The Stats

There were no major stats from the Eurozone for the markets to consider, leaving the ECB Economic Bulletin in focus.

The ECB Economic Bulletin

Salient points from today’s Economic Bulletin included:

  • Global economy remains on a recovery path, although persisting supply bottlenecks, rising commodity prices, and Omicron weigh on near-term growth prospects.
  • Recent surveys suggest that growth momentum remained weak at the start of Q4.
  • While the euro area economy continues to recover, growth is also moderating.
  • Activity is expected to pick up strongly om the course of the year, however.
  • Output should exceed pre-pandemic levels in Q1 of 2022.
  • While supply chain bottlenecks persist, these should ease during 2022.

Growth

  • Projections are for annual growth of 5.1% in 2021, 4.2% in 2022, 2.9% in 2023, and 1.6% in 2024. Compared with September forecasts, 2022 growth was revised down, while 2023 growth was upwardly revised.

Inflation

  • Inflation will remain above 2% for most of 2022 and is expected to remain elevated in the near-term.
  • The ECB expects energy prices to stabilize, consumption patterns to normalize, and price pressures stemming from global supply bottlenecks to subside this year.
  • December annual inflation forecasts were 2.6% in 2021, 3.2% in 2022, and 1.8% in 2023 and 2024. These were materially higher than September projections.

From the U.S

Wholesale inflation figures were in focus following consumer inflation figures from Wednesday along with jobless claims.

In the week ending 7th December, initial jobless claims rose from 207k to 230k. Economists had forecast a fall to 200k.

On the inflation front, the producer price index rose by just 0.2% in December versus a forecasted 0.4% increase. In November, the index had risen by 1.0%. The Core producer price index rose by 0.5% after having risen by 0.9% in November. Economists had forecast a 0.5% increase.

The annual wholesale rate of inflation softened from 9.8% to 9.7% in December.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Thursday. Continental and Daimler led the way, with gains of 2.73% and 2.74% respectively. BMW and Volkswagen ended the day up by 1.61% and by 0.92% respectively.

It was a mixed day for the banks, however. Deutsche Bank fell by 0.20%, while Commerzbank rose by 1.15%.

From the CAC, it was a bullish day for the banks. Credit Agricole rose by 0.77%, with Soc Gen and BNP Paribas rallying by 2.18% and by 2.50% respectively.

The French auto sector also had a bullish session. Stellantis NV rose by 2.62%, with Renault jumping by 4.58%.

Air France-KLM rose by 0.86%, while Airbus SE ended the day down by 1.16%.

On the VIX Index

It was back into the green for the VIX on Thursday, marking just a 2nd rise in 6 sessions.

Reversing a 4.29% fall from Wednesday, the VIX surged by 15.27% to end the day at 20.31.

The NASDAQ tumbled by 2.51%, with the Dow and the S&P500 seeing losses of 0.49% and 1.42% respectively.

VIX 140122 Daily Chart

The Day Ahead

It’s a busier day ahead on the Eurozone’s economic calendar. Finalized December inflation figures from Spain and France are due out along with trade data for the Eurozone. Barring marked revisions to the prelim figures, expect the Eurozone’s trade data to have a greater influence.

On the monetary policy front, ECB President Lagarde is also scheduled to speak. The markets will be looking for any guidance on inflation and monetary policy.

Later in the session, U.S retail sales will also be key. An unexpected slide in consumption could question the FED’s views on the economic outlook. Earlier in the day, trade data from China will set the tone.

Away from the economic calendar, U.S corporate earnings will also be a key driver. Citi, JPMorgan Chase, and Wells Fargo are scheduled to release earnings results today.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 39 points.

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

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.

European Equities: U.S Inflation the Key Driver Following Powell’s Testimony

Economic Calendar

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

The Majors

It was a bullish day for the European majors on Tuesday. The DAX30 rallied by 1.10%, with the CAC40 and the EuroStoxx600 rising by 0.95% and by 0.84% respectively. Tuesday’s gains brought to an end a 3-day losing streak.

A quiet economic calendar left the majors in the hands of ECB President Lagarde and FED Chair Powell. Market jitters over persistent inflationary pressure and possible influence on monetary policy has tested support for riskier assets at the turn of the year.

Away from the economic calendar, earnings were back in focus, with optimism of another upbeat season adding to the upside. The gains were not enough to fully reverse Monday’s sell-off, however, as the markets await U.S inflation figures due out today and tomorrow.

The Stats

There were no major stats for the markets to consider. In spite of the anticipation, there were no policy related comments from the ECB President to influence.

From the U.S

There were also no major stats from the U.S to provide the majors with direction late in the day. The lack of stats left the spotlight on FED Chair Powell, who gave testimony to lawmakers.

Market reaction to testimony was positive, with the FED Chair stating that the economy can cope with the tightening monetary policy. Powell noted that the economy has expanded rapidly in spite of COVID-19. On the inflation front, Powell said that inflation needs more attention. The FED will ensure that high inflation does not become entrenched. Powell also noted that, while a move on monetary policy to normal is needed, it’s a long road to normal.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Tuesday. Continental and Daimler ended the day down by 0.59% and by 0.70% respectively. BMW rose by 0.84%, however, with Volkswagen gaining 0.33%.

It was a bearish day for the banks. Deutsche Bank fell by 0.48%, with Commerzbank sliding by 4.12%.

From the CAC, it was a mixed day for the banks. Credit Agricole slipped 0.19%, while Soc Gen and BNP Paribas ended the day up by 0.20% and by 0.56% respectively.

The French auto sector also had a mixed session. Stellantis NV rallied by 2.09%, while Renault ended the day with a 1.26% loss.

Air France-KLM and Airbus SE saw modest gains of 0.26% and by 0.42% respectively.

On the VIX Index

It was back into the red for the VIX on Tuesday. Reversing a 3.41% gain from Monday, the VIX fell by 5.10% to end the day at 18.41.

The NASDAQ rallied by 1.41%, with the Dow and the S&P500 seeing gains of 0.51% and 0.92% respectively.

VIX 120122 Daily Chart

The Day Ahead

It’s a quiet day ahead on the Eurozone’s economic calendar. Industrial production figures for the Eurozone will be in focus through the early part of the European session. The November figures are unlikely to influence the ECB’s views on inflation and monetary policy, however, which should limit the impact on the majors.

Later in the session, U.S inflation figures for December will be key. Expect plenty of market sensitivity to the numbers, Softer inflation would be the ideal scenario for the markets after Powell’s testimony to lawmakers.

Inflation figures from China, due out ahead of the European open, will likely set the tone.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 10 points.

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

UK stocks edge higher, cybersecurity firm Darktrace soars on forecast lift

By Shashank Nayar

(Reuters) -London’s blue-chip index rose on Tuesday, as global equities paused after a recent sell-off on concerns about tighter monetary policies, while midcap stocks bounced off near three-week lows.

The internationally focussed FTSE 100 ended 0.6% higher, still lagging its European peers such as Germany’s DAX and France’s CAC 40 that have been hit hard recently due to a bigger exposure to technology firms. [.EU]

Darktrace surged 6.9% and was among the top gainers on the mid-index after raising its full-year outlook for revenue and earnings margin following strong customer growth and retention in the first half of the year.

“UK’s market is less exposed to tech stocks and with the sector inherently being more volatile given their nature, taking that away from the FTSE 100 gives it a more stable personality right now,” said Stuart Cole, head macro economist at Equiti Capital.

“We have the Bank of England and its willingness to further tighten policies following its December hike … there is a sense that monetary normalisation is on the cards.”

Investors have increased bets of an interest rate hike as early as next month after the Bank of England surprised with a rate hike in December. Rate-sensitive banks have outperformed with a near 10% gain so far in 2022.

Gaming companies Entain and Flutter rose more than 1% after Citigroup published bullish views on the sector amid prospects for U.S. regulation of online sports betting.

Robert Walters rose 4.0% after the recruitment firm forecast annual profit to exceed current expectations and posted higher net fees as it benefited from businesses ramping up hiring.

The FTSE 250 mid-cap index climbed 0.1% after sinking to its lowest since Dec. 22 in the previous session.

Marks & Spencer rose 1.3% after data from market researcher NielsenIQ showed it was Britain’s fastest growing food retailer in the Christmas quarter.

(Reporting by Sruthi Shankar, Shashank Nayar and Amal S in Bengaluru; Editing by Shounak Dasgupta and Lisa Shumaker)

European Equities: ECB President Lagarde and FED Chair Powell in Focus

Economic Calendar

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

The Majors

It was a bearish start to the week for the European majors on Monday. The DAX30 fell by 1.13%, with the CAC40 and the EuroStoxx600 sliding by 1.44% and by 1.48% respectively.

Upbeat economic data from the Eurozone failed to provide support, with market jitters over FED monetary policy weighing. News of Goldman Sachs projecting the FED to lift rates 4 times this year added to the market angst.

The Goldman Sachs projections came ahead FED Chair Powell testimony today and U.S inflation figures tomorrow.

The Stats

It was a relatively quiet start to the week on the Eurozone economic calendar. Key stats included Eurozone investor confidence and Eurozone unemployment figures.

Sentix Investor Confidence

In January, the Eurozone’s Sentix Investor Confidence Index increased from 13.5 to 14.9. Economists had forecast a fall to 12.0.

According to the January survey,

  • The current assessment improved by 3.0 points, while the expectations component stagnated.
  • For Germany, the overall index increased by 2.6%, supported by a 6.2% jump in the current situation component. The expectations component held steady at +15.0 points.

Unemployment

In November, the Eurozone’s unemployment rate slipped from 7.3% to 7.2%, which was in line with forecasts.

According to Eurostat,

  • The youth unemployment rate was 15.5%, down from 15.8% in October.
  • Compared with November 2020, the number of unemployed youths decreased by 188,000.
  • For the Eurozone, the unemployment rate had stood at 8.1% in November 2020.

From the U.S

There were no major stats from the U.S to provide the majors with direction late in the day.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Continental and Daimler ended the day down by 2.12% and by 0.69% respectively. BMW rallied by 1.67%, however, with Volkswagen rising by 0.01%.

It was also a mixed day for the banks. Deutsche Bank gained 0.06%, while Commerzbank slid by 2.14%.

From the CAC, it was a mixed day for the banks. Credit Agricole gained 0.54%, while Soc Gen and BNP Paribas ended the day down by 0.56% and by 0.78% respectively.

The French auto sector had a bearish session. Stellantis NV and Renault ended the day with losses of 0.77% and 0.61% respectively.

Air France-KLM and Airbus SE rose by 0.96% and by 0.19% respectively.

On the VIX Index

It was back into the green for the VIX on Monday. Partially reversing a 4.33% loss from Friday, the VIX rose by 3.41% to end the day at 19.40.

The NASDAQ gained 0.05%, while the Dow and the S&P500 saw losses of 0.45% and 0.14% respectively.

 

The Day Ahead

It’s a quiet day ahead on the Eurozone’s economic calendar. There are no major stats from the Eurozone or the U.S to provide the majors with direction. While there are no stats, ECB President Lagarde is scheduled to speak later today. The markets will be looking for any shift in view on inflation in the wake of the FED’s latest meeting minutes.

Later in the session, however, FED Chair Powell testimony to lawmakers will likely be the main event of the day. The FED Chair could be in for a tough session on inflation. Any guidance on where he sees rates by the end of the year will be of significance.

The Futures

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

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

European Equities: Eurozone Unemployment and COVID-19 Stats in Focus

Economic Calendar

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 

The Majors

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.

The Stats

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.

VIX 090122 Daily Chart

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.

The Futures

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.

The Week Ahead – Central Bank Chatter, COVID-19, and Stats from China and the U.S Key

On the Macro

It’s a quieter week ahead on the economic calendar, with 49 stats in focus in the week ending 14th January. In the week prior, just 63 stats had been in focus.

For the Dollar:

December inflation figures will be in focus on Wednesday along with wholesale inflation numbers on Thursday. Expect plenty of interest in the numbers, with inflation key to the FED’s policy moves for the year.

On Thursday, jobless claims will also draw interest ahead of retail sales and consumer sentiment figures on Friday.

With the markets now zoomed in on the FED, FED Chair Powell is due to give testimony on Tuesday before the Committee on Banking, Housing, and Urban affairs. Expect plenty of market interest, with FOMC member chatter in the week also needing consideration.

In the week ending 7th January, the Dollar Spot Index rose by 0.05% to 95.719.

For the EUR:

Unemployment and industrial production figures for the Eurozone will be the key stats early in the week. On Friday, Eurozone trade data will also draw interest.

Finalized member state inflation figures due out in the week should have a muted impact, however, barring any upward revisions.

On the monetary policy front, the markets will be looking for any shift in ECB stance on inflation. ECB President Lagarde is scheduled to speak in the week.

For the week, the EUR slipped by 0.08% to $1.1361.

For the Pound:

It’s a relatively busy week ahead on the economic calendar.

Industrial and manufacturing production figures are due out on Friday along with GDP and trade data.

Expect the GDP and manufacturing production figures to be key.

The Pound rose by 0.41% to end the week at $1.3588.

For the Loonie:

It’s a particularly quiet week ahead on the economic calendar.

There are no major stats due out of Canada to provide the Loonie with direction. With no stats to consider, the Loonie will be in the hands of crude oil prices and market risk sentiment.

The Loonie ended the week down 0.05% to C$1.2643 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

Retail sales and trade data will be in focus on Tuesday. Expect retail sales to be the key stat, however.

The Aussie Dollar slid by 1.13% to $0.7181.

For the Kiwi Dollar:

Economic data is limited to building consents that should have a muted impact on the Kiwi Dollar.

The Kiwi Dollar ended the week down by 0.69% to $0.6779.

For the Japanese Yen:

There are no material stats for the markets to consider. A lack of stats will leave the Yen in the hands of market risk sentiment and yield differentials.

The Japanese Yen fell by 0.42% to ¥115.560 against the U.S Dollar.

Out of China

Inflation figures for December will draw interest on Wednesday. Expect any market pickup in inflationary pressure to test support for riskier assets. At the end of the week, trade data will also influence. Weak numbers could point to further supply chain disruption stemming from the Omicron strain.

The Chinese Yuan ended the week down by 0.34% to CNY6.3778 against the U.S Dollar.

Geo-Politics

Nothing new to consider in the week ahead, with China and Capitol Hill and Russia continuing to be the key areas of focus.

COVID-19

COVID-19 news updates will remain a key area focus. Risk aversion could hit should a new strain of the virus appear in a developed economy.

European Equities: A Week in Review – 07/01/22

The Majors

It was a mixed start to the year for the European majors in the week ending 7th January.

The EuroStoxx600 slipped by 0.40%, while the CAC40 and the DAX30 ended the week up by 0.40% and by 0.91% respectively.

It was a choppy week for the majors, which kicked off the year with strong gains early in the week. Continued reports of Omicron symptoms being milder, with fewer hospitalizations were market positive. Economic data from the Eurozone were skewed to the negative, however, with inflationary pressures lingering.

While milder, surging COVID-19 cases throughout the week coupled with disappointing stats tested support for the majors later in the week.

Adding further pressure were the FOMC meeting minutes, which caught the markets off-guard. Talk of the need to address inflation with sooner than expected rate hikes and the need to reduce the balance sheet weighed.

The Stats

Private sector PMIs for the Eurozone and member states, inflation, and the German economy were in focus.

Manufacturing sector growth remained relatively stable in December, while the services sector took a hit.

The Eurozone’s manufacturing PMI fell from 58.4 to 58.0, while the services PMI declined from 55.9 to 53.1. As a result, the Eurozone Composite PMI fell from 55.4 to a 9-month low 53.3.

For Germany, retail sales, unemployment, and industrial production figures were all upbeat for November. With the sharp rise in Omicron cases late in the year, however, the numbers had a relatively muted impact on the majors. A sharp narrowing in Germany’s trade surplus also failed to move the dial.

On the inflation front, however, the prelim numbers pointed to another pickup in inflationary pressure in December.

While France’s annual rate of inflation held steady at 2.8%, Germany’s picked up from 5.2% to 5.3%. Italy’s annual rate of inflation accelerated from 3.7% to 3.9%. As a result, the Eurozone’s annual rate of inflation ticked up from 4.9% to 5.0%. The uptick will likely put more pressure on the ECB to make a move, particularly after the FED’s shift in stance on interest rates.

From the U.S

Private sector PMIs and labor market stats were in focus ahead of Friday’s all-important nonfarm payrolls.

The stats were skewed to the negative, with private sector growth slowing. In December, the ISM Manufacturing PMI fell from 61.1 to 58.7. More significantly, the ISM Non-Manufacturing PMI declined from 69.1 to 62.0.

Labor market stats were also skewed to the negative in the week. In November, JOLT’s job openings stood at 10.562m, which was down from 11.091m in October. Initial jobless claims increased from 200k to 207k in the week ending 31st December.

More significantly, however, was a modest 199k increase in nonfarm payrolls in December. Economists had forecast a 400k rise. The markets were likely expecting more following an 800k increase in nonfarm payrolls according to the ADP. In spite of the lower number, the U.S unemployment rate fell from 4.2% to 3.9%.

On the monetary policy front, the FOMC meeting minutes were also in focus mid-week. The global equity markets responded negatively to more hawkish minutes than expected. The minutes revealed that the FED may need to lift rates sooner than had been previously priced in.

The Market Movers

From the DAX, it was a bullish week for the auto sector. BMW and Daimler rallied by 8.03% and by 8.83% respectively to lead the way. Continental and Volkswagen ended the week up by 3.87% and by 5.78% respectively.

It was a particularly bullish week for the banking sector. Deutsche Bank rallied by 12.23%, with Commerzbank surging by 17.49%.

From the CAC, it was a bullish week for the banks. Soc Gen rallied by 9.93%, with BNP Paribas and Credit Agricole ending the week with gains of 6.14% and 7.25% respectively.

The French auto sector also had a bullish week. Stellantis NV and Renault rose by 7.94% and by 5.53% respectively.

Air France-KLM ended the week up by 9.76%, with Airbus rising by 4.75%.

On the VIX Index

It was back into the green for the VIX in the week ending 7th January, marking a 5th rise in 8-weeks.

Reversing a 4.12% decline from the previous week, the VIX rose by 8.94% to end the week at 18.76.

2-days in the green from 5 sessions, which included an FOMC driven 16.68% jump on Wednesday, delivered the upside.

For the week, the NASDAQ slid by 4.53%, with the Dow and the S&P500 ending the week down by 0.29% and by 1.87% respectively.

VIX 080122 Weekly Chart

The Week Ahead

It’s quieter week ahead on the Eurozone economic calendar. Key stats include industrial production, trade, and unemployment figures for the Eurozone. Expect the industrial production and trade data to draw the greatest interest.

From the U.S, inflation figures mid-week, together with the weekly jobless claims on Thursday and retail sales on Friday will also influence.

From Elsewhere

Inflation figures from China will also draw plenty of interest on Wednesday. Market sensitivity to inflation remains as the FED gets ready for lift-off.

Away from the Economic Calendar

News updates on COVID-19 will need continued monitoring, with any talk of new strains the downside risk for the majors.

The Weekly Wrap – COVID-19, Economic Data, and FED Monetary Policy Delivered a Choppy Week

The Stats

It was a particularly busy week on the economic calendar, in the week ending 7th January.

A total of 63 stats were monitored, which was up from 15 stats in the week prior.

Of the 63 stats, 34 came in ahead forecasts, with 23 economic indicators coming up short of forecasts. There 6 stats that were in line with forecasts in the week.

Looking at the numbers, 25 of the stats reflected an upward trend from previous figures. Of the remaining 38 stats, 31 reflected a deterioration from previous.

For the Greenback, it was back into the green. In the week ending 7th January, the Dollar Spot Index rose by 0.07% to 95.739. A 0.60% slide on Friday limited the upside, however. In the previous week, the Dollar Spot Index declined by 0.36% to 95.670. While finding strong support from the more hawkish FOMC meeting minutes on Wednesday, disappointing NFP numbers on Friday weighed.

Out of the U.S

Private sector PMIs and labor market stats were in focus ahead of Friday’s all-important nonfarm payrolls.

The stats were skewed to the negative, with private sector growth slowing. In December, the ISM Manufacturing PMI fell from 61.1 to 58.7. More significantly, the ISM Non-Manufacturing PMI declined from 69.1 to 62.0.

Labor market stats were also skewed to the negative in the week. In November, JOLT’s job openings stood at 10.562m, which was down from 11.091m in October. Initial jobless claims increased from 200k to 207k in the week ending 31st December.

More significantly, however, was a modest 199k increase in nonfarm payrolls in December. Economists had forecast a 400k rise. The markets were likely expecting more following an 800k increase in nonfarm payrolls according to the ADP. In spite of the lower number, the U.S unemployment rate fell from 4.2% to 3.9%.

On the monetary policy front, the FOMC meeting minutes were also in focus mid-week. The U.S equity markets responded negatively to more hawkish minutes than expected, which drove demand for the Dollar. The minutes revealed that the FED may need to lift rates sooner than had been previously priced in.

Out of the UK

Finalized private sector PMIs were in focus, with the stats Pound positive for the week. In December, the manufacturing PMI rose from 57.6 to 57.9, with the services PMI up from 53.2 to 53.6. As a result, the composite PMI increased from 53.2 to 53.6. All 3 were revised up from prelim figures.

In the week, the Pound rose by 0.41% to end the week at $1.3588 In the week prior, the Pound had rallied by 1.09% to $1.3532.

The FTSE100 ended the week up by 1.36% following a 0.17% gain from the previous week.

Out of the Eurozone

Private sector PMIs for the Eurozone and member states, inflation, and the German economy were in focus.

Manufacturing sector growth remained relatively stable in December, while the services sector took a hit.

The Eurozone’s manufacturing PMI fell from 58.4 to 58.0, while the services PMI declined from 55.9 to 53.1. As a result, the Eurozone Composite PMI fell from 55.4 to a 9-month low 53.3.

For Germany, retail sales, unemployment, and industrial production figures were all upbeat for November. With the sharp rise in Omicron cases late in the year, however, the numbers had a relatively muted impact on the EUR. A sharp narrowing in Germany’s trade surplus also failed to move the dial.

On the inflation front, however, the prelim numbers pointed to another pickup in inflationary pressure in December.

While France’s annual rate of inflation held steady at 2.8%, Germany’s picked up from 5.2% to 5.3%. Italy’s annual rate of inflation accelerated from 3.7% to 3.9%. As a result, the Eurozone’s annual rate of inflation ticked up from 4.9% to 5.0%. The uptick will likely put more pressure on the ECB to make a move, particularly after the FED’s shift in stance on interest rates.

For the week, the EUR slipped by 0.08% to $1.1361. In the week prior, the EUR had risen by 0.45% to $1.1370.

The EuroStoxx600 slipped by 0.40%, while the CAC40 and the DAX30 ended the week up by 0.91% and by 0.40% respectively.

For the Loonie

Trade data, together with employment and Ivey PMI numbers were in focus. The stats were skewed to the positive for the Loonie.

In November, Canada’s trade surplus widened from C$2.26bn to C$3.13bn. Employment rose by a further 54.7k in December, after a 153.7k jump in November. As a result, Canada’s unemployment rate fell from 6.0% to 5.9%.

The only negative for the Loonie was a sharp fall in the Ivey PMI from 61.2 to 45.0 in December.

Adding support to the Loonie in the week, was a pickup in crude oil prices. WTI Crude ended the week up by 4.91% to $78.9 per barrel.

In the week ending 7th January, the Loonie slipped by 0.05% to C$1.2643 against the Greenback. In the week prior, the Loonie had rallied by 1.39% to C$1.2637.

Elsewhere

It was a bearish week for the Aussie Dollar and the Kiwi Dollar.

The Aussie Dollar slid by 1.13% to $0.7181, with the Kiwi Dollar falling by 0.69% to end the week at $0.6779.

For the Aussie Dollar

There were no major stats to provide direction.

For the Kiwi Dollar

It was also a quiet week for the Kiwi Dollar, with no major stats for the markets to consider.

For the Japanese Yen

Finalized private sector PMIs, household spending, and inflation were key stats in the week.

It was a mixed set of numbers, however. The all-important services sector PMI fell from 53.0 to 52.1, with household spending also on the slide. In November, household spending fell by 1.2%, month-on-month.

Inflation figures were positive, however, with Tokyo’s core annual rate of inflation picking up from 0.3% to 0.5% in December.

The Japanese Yen declined by 0.42% to ¥115.560 against the U.S Dollar. In the week prior, the Yen had fallen by 0.61% to ¥115.080.

Out of China

It was a relatively quiet week on the economic data front. Private Sector PMIs were back in focus.

In December, the Caixin Manufacturing PMI rose from 49.9 to 50.9, with the services PMI increasing from 52.1 to 53.1.

In the week ending 7th January, the Chinese Yuan fell by 0.34% to CNY6.3778. In the week prior, the Yuan had ended the week up by 0.18% to CNY6.3561.

The Hang Seng Index ended the week up by 0.41%, while the CSI300 slid by 2.39%.

European Equities: Eurozone Inflation and US Nonfarm Payrolls in Focus

Economic Calendar

Friday, 7th January

German Industrial Production (MoM) (Nov)

German Trade Balance (Nov)

French Consumer Spending (MoM) (Nov)

Eurozone CPI (YoY) (Dec) Prelim

Eurozone Retail Sales (MoM) (Nov)

The Majors

It was a choppy day for the European majors on Thursday. The CAC40 slid by 1.72%, with the DAX30 and the EuroStoxx600 ending the day down by 1.35% and by 1.25% respectively.

Economic data from Germany took a back seat as the markets responded to more hawkish than expected FOMC meeting minutes from Wednesday.

Economic data from the U.S also failed to deliver support. Another big jump in payrolls in December could more than pencil in a FED rate hike in March.

The Stats

It was quieter Eurozone economic calendar this morning. German factory orders were in focus early in the European session. Later in the day, German prelim inflation figures for December will drew interest. German construction PMI numbers that were also early in the session had a muted impact on the majors.

Factory Orders

In November, factory orders increased by 3.7% month-on-month, partially reversing a 5.8% slide from October. Economists had forecast a 2.1% increase.

According to Destatis,

  • In November 2021, the largest increase in orders (+32.0%) was recorded in the manufacture of other transport equipment. These include aircraft, ships, trains, etc.
  • New orders in the manufacture of motor vehicles and semi-trailers were up 7.0%. In October, orders had been down by 4.7%.
  • Foreign demand drove new orders (+8.0%) in November. Significantly, new orders from the euro area increased by 13.1%.
  • Producers of intermediate goods recorded a 1.2% increase in new orders.
  • Capital goods (+5.3%) and consumer goods (+3.8%) fared better in the month.
  • Year-on-year, factory orders were up 1.3%.

German Inflation

In December, the annual rate of inflation picked up from 5.2% to 5.3% versus a forecasted 5.1%. Month-on-month, consumer prices rose by 0.5%, reversing a 0.2% decline from November.

From the U.S

Weekly jobless claims and ISM Non-manufacturing PMI numbers were in focus.

In the week ending 31st December, initial jobless claims rose from 200k to 207k. Economists had forecast a decline to 197k.

Service sector activity took a hit in December, with the Omicron strain weighing. The ISM Non-manufacturing PMI fell from 69.1 to 62.0 versus a forecasted 66.9.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. Volkswagen led the way down, falling by 0.99%, with Continental ending the day with a 0.64% loss. BMW and Daimler saw more modest losses of 0.02% and 0.12% respectively.

It was also a bullish day for the banks, however. Deutsche Bank and Commerzbank rose by 2.53% and by 1.74% respectively.

From the CAC, it was also a bullish day for the banks. Soc Gen gained 1.86%, with BNP Paribas and Credit Agricole ending the day up by 1.36% and by 1.15% respectively.

The French auto sector had a mixed session. Stellantis NV fell by 0.99%, while Renault ended the day up by 0.38%.

Air France-KLM gave up more of Tuesday’s 8.13% gain, falling by 2.20%, with Airbus SE declining by 1.46%

On the VIX Index

It was back into the red for the VIX on Thursday, marking a 9th fall in 12 sessions.

Partially reversing a 14.05% jump from Wednesday the VIX slipped by 0.61% to end the day at 19.61.

The Dow fell by 0.47%, with the NASDAQ and the S&P500 seeing losses of 0.13% and 0.10% respectively.

VIX 070122 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone’s economic calendar. Early in the European session, industrial production and trade data for Germany will be in focus. Later in the session, Eurozone inflation and retail sales figures will also draw interest. Expect the Eurozone’s inflation figures to be key. Other stats due out include French consumer spending figures that should have a muted impact on the majors.

From the U.S, nonfarm payrolls will be the key stat of the day, however. A sharp rise in nonfarm payrolls would likely be considered a greenlight for a March rate hike.

Away from the economic calendar, COVID-19 news will need continued monitoring, however. Downside risks remain with the threat of new strains ever present.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 63 points, while the DAX was down by 16 points.

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

European Equities: Reaction to the FOMC Meeting Minutes Likely to Overshadow Today’s Stats

Economic Calendar

Thursday, 6th January

German Factory Orders (MoM) (Nov)

IHS Markit Construction PMI (Dec)

German CPI (MoM) (Dec)

Friday, 7th January

German Industrial Production (MoM) (Nov)

German Trade Balance (Nov)

French Consumer Spending (MoM) (Nov)

Eurozone CPI (YoY) (Dec) Prelim

Eurozone Retail Sales (MoM) (Nov)

The Majors

It was yet another bullish day for the European majors on Wednesday. The EuroStoxx600 rose by 0.07%, with the CAC40 and the DAX30 ending the day up by 0.74% and by 0.81% respectively.

Economic data from the Eurozone failed to weigh on risk sentiment in spite of the Eurozone’s composite PMI falling to a 9-month low. Eurozone economic powerhouse Germany saw its composite PMI fall to an 18-month low in December. The markets were in forgiving mood, with the services sector doing the damage as a result of the Omicron strain and surge in new cases.

The upside on the day was modest, however, with the FOMC meeting minutes out after the European close.

The Stats

It was another busy Eurozone economic calendar this morning. Member state and Eurozone service sector and composite PMIs were in focus.

Member States

For Spain, the services PMI fell from 59.8 to 55.8 versus a forecasted 57.5.

Service sector activity in Italy saw slower growth, with the PMI down from 55.9 to 53.0. Economists had forecast a fall to 54.0.

For France, the services PMI fell from 57.4 to 57.0, which was down from a prelim 57.1.

Germany’s services PMI declined from 52.7 to 48.7, which was up from a prelim 48.4.

The Eurozone

For the Eurozone, the services PMI fell from 55.9 to 53.1, which was down from a prelim 53.3.

As a result, the Composite PMI slipped from 55.4 to 53.3, which was down from a prelim 53.4.

According to the December survey,

  • Economic growth eased to a 9-month low in December.
  • Rising COVID-19 cases had a more marked impact on service sector activity.
  • At the end of the year, supply-related disruptions continued to impact production schedules.
  • In spite of supply chain issues, the manufacturing sector outpaced the services sector for the 1st time since July.
  • Composite output PMIs by country all declined during December.
  • Slower rates of growth were seen in Ireland, France, Spain, and Italy.
  • Demand for goods and services across the Eurozone rose at the slowest pace since March.
  • More significantly, demand from international clients rose at the slowest pace since January.
  • By contrast, business optimism improved marginally in December, coinciding with a pickup in the pace of hiring.
  • On the inflation front, output charges and input costs increased at the second-sharpest rates on record.

By Country

  • Ireland ranked 1st, with a composite PMI of 56.5.
  • France came in 2nd, with a 2-month low 55.8, following by Spain, with an 8-month low 55.4.
  • German sat behind Italy at the bottom of the table with an 18-month low 49.9.

From the U.S

ADP nonfarm employment change and finalized services and composite PMI numbers were in focus.

In December, the ADP reported an 807K surge in nonfarm payrolls versus a forecasted 400k increase. Nonfarm payrolls had increased by 505k in November, according to the ADP.

Private sector PMI numbers were also upbeat. In December, the Markit Services PMI slipped from 58.0 to 57.6, which was up from a prelim 57.5.

On the monetary policy front, the FOMC meeting minutes were released after the European close. The U.S markets responded negatively to more hawkish minutes than expected, which will likely weigh on the majors going into the European open. The minutes revealed that the FED may need to lift rates sooner than previously priced in.

The Market Movers

For the DAX: It was another bullish day for the auto sector on Wednesday. Daimler led the way once more, rallying by 4.01%, with BMW and Volkswagen ending the day up by 2.18% and by 2.15% respectively. Continental saw a more modest 1.69% gain on the day.

It was also a bullish day for the banks. Deutsche Bank rose by 1.35%, with Commerzbank gaining 1.99%.

From the CAC, it was a bullish day for the banks. BNP Paribas rose by 0.13%, with Soc Gen and Credit Agricole ending the day up by 1.02% and by 1.00% respectively.

The French auto sector also had a bullish session. Stellantis NV and Renault rallied by 5.10% and by 5.31% respectively.

Air France-KLM gave up some of Tuesday’s 8.13% gain, falling by 1.62%, while Airbus SE rose by 1.28%

On the VIX Index

It was a 2nd consecutive day in the green for the VIX on Wednesday, marking just the 3rd rise in 11 sessions.

Following a 1.87% gain on Tuesday the VIX jumped by 14.05% to end the day at 19.73.

The NASDAQ tumbled by 3.34%, with the Dow and the S&P500 seeing losses of 1.07% and 1.94% respectively.

VIX 060122 Daily Chart

The Day Ahead

It’s quieter day ahead on the Eurozone’s economic calendar. Economic data includes German factory orders, construction PMI, and inflation figures. Expect factory orders for November and prelim inflation figures for December to be key.

From the U.S, the market’s preferred ISM Non-Manufacturing PMI and weekly jobless claims will also influence later in the session. The markets will be looking for any impact of the Omicron strain on labor market conditions and service sector activity.

Going into the open, the FOMC meeting minutes from overnight will set the tone following the sell-off in the U.S. China’s Caixin services PMI, due out later this morning, will unlikely have an impact, however.

Away from the economic calendar, COVID-19 news will need continued monitoring. While it has been a bullish start to the year, downside risks remain over the Omicron strain and any news of new strains.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 82 points, while the DAX was down 157 points.

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

French court backs class action against Sanofi over Depakine drug

By Tangi Salaün

PARIS (Reuters) -A French court ruled on Wednesday that families of victims of Depakine, an epilepsy drug that caused birth defects and learning difficulties when taken during pregnancy, could join a class action lawsuit against drugmaker Sanofi.

Sanofi said it would appeal against the decision.

“This is a great victory. This decision acknowledges the responsibility of the laboratory,” Marine Martin, head of victims association APESAC, told Reuters.

APESAC, which represents 7,500 families, launched the class action in September 2021 against Sanofi, which was placed under formal investigation in 2020 on charges of manslaughter over Depakine https://www.reuters.com/article/us-sanofi-depakine-idUSKBN24Z14C.

Sanofi denied those charges at the time and said it would challenge the merits of the investigation.

It said on Wednesday the decision of the court, the Tribunal Judiciaire de Paris, contradicted previous ones in this case.

“The laboratory will appeal this decision. It is partly based on questionable conclusions of an expert’s report submitted during the criminal proceedings,” the drugmaker said in a statement.

French health authorities have estimated Depakine was responsible for deformities in between 2,150 and 4,100 children and neuro-developmental defects in up to 30,400 children.

The class action would be a first in France’s health sector. APESAC has said families could obtain hundreds of millions of euros in compensation.

Sanofi’s shares were up 0.67% at 88.66 euros at 1130 GMT, compared with a 0.5% rise on France’s benchmark CAC 40.

(Additional reporting by Myriam Rivet, Dominique Vidalon and Benoit Van OverstraetenEditing by Mark Potter)

European Equities: Service Sector PMIs and US Labor Market Data in Focus

Economic Calendar

Wednesday, 5th January

Spanish Services PMI (Dec)

Italian Services PMI (Dec)

French Services PMI (Dec) Final

German Services PMI (Dec) Final

Eurozone Markit Composite PMI (Dec) Final

Eurozone Services PMI (Dec) Final

Thursday, 6th January

German Factory Orders (MoM) (Nov)

IHS Markit Construction PMI (Dec)

German CPI (MoM) (Dec)

Friday, 7th January

German Industrial Production (MoM) (Nov)

German Trade Balance (Nov)

French Consumer Spending (MoM) (Nov)

Eurozone CPI (YoY) (Dec) Prelim

Eurozone Retail Sales (MoM) (Nov)

The Majors

It was another bullish day for the European majors on Tuesday. The CAC40 rallied by 1.39% to lead the way, with the DAX30 and the EuroStoxx600 both ending the day up by 0.82% respectively. For the EuroStoxx600, it was another record high on the day.

Upbeat economic data from Germany delivered support for the majors, with inflation figures from France also market positive.

Travel stocks were amongst the front runners on the day, with autos and bank stocks also finding strong support.

The Stats

It was another busy Eurozone economic calendar this morning. German retail sales and unemployment figures were in focus along with prelim French inflation numbers for December.

The German Economy

According to Destatis, retail sales rose by 0.6% in November, following a 0.5% increase in October. Economists had forecast a 0.5% decline. Year-on-year, retail sales fell by 2.9% versus a forecasted 4.9% slide. In October, retail sales had fallen by 2.0%.

Unemployment figures were also upbeat. In December, unemployment fell by a further 23k after having fallen by 34k in November. As a result, the unemployment rate slipped from 5.3% to 5.2%. Economists had forecast a fall in unemployment of 15k and for the unemployment rate to hold steady at 5.3%.

French Inflation

According to Insee.fr, December’s annual rate of inflation held steady at 2.8% in December, according to prelim figures, which was in line with forecasts.

  • Food prices increased by 1.4% versus 0.5% in November.
  • Energy prices were up 18.6% versus 21.6% in November.
  • Prices for manufactured products increased by 1.2% and prices for services by 1.8%.
  • In November, prices for manufactured products had been up by 0.8% and services by 1.9%.
  • Month-on-month, consumer prices rose by 0.2% after having risen by 0.4% in November.

From the U.S

ISM Manufacturing PMI and JOLT’s job openings drew attention late in the European session.

In December, the ISM Manufacturing PMI slipped from 61.1 to 58.7 versus a forecasted decline to 60.0. The ISM Manufacturing Employment sub-index climbed from 53.3 to 54.2%, however.

In November, JOLT’s job openings fell from 11.091m to 10.562m. Economists had forecast openings of 11.075m.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Tuesday. Daimler led the way, rallying by 4.96%, with BMW and Volkswagen ending the day up by 3.13% and by 3.42% respectively. Continental saw a more modest 1.21% gain on the day.

It was also a bullish day for the banks. Deutsche Bank rose by 3.03%, with Commerzbank rallying by 4.75%.

From the CAC, it was a bullish day for the banks. Soc Gen rallied by 4.83%, with BNP Paribas and Credit Agricole ending the day up by 3.35% and by 2.37% respectively.

The French auto sector also had a bullish session. Stellantis NV and Renault saw gains of 3.95% and 2.77% respectively.

Air France-KLM led the way, surging by 8.13%, with Airbus SE rising by 2.36%

On the VIX Index

It was back into the green for the VIX on Tuesday, marking just the 2nd rise in 10 sessions.

Partially reversing a 3.60% fall from Monday, the VIX rose by 1.87% to end the day at 16.91.

The NASDAQ slid by 1.33%, with the S&P500 declining by 0.06%. It was a bullish day for the Dow, however, which rose by 0.59%.

VIX 050122 Daily Chart

The Day Ahead

It’s yet another busy day ahead on the Eurozone’s economic calendar. Service sector PMIs for Italy and Spain are due out in the early part of the European session. Finalized services and composite PMIs are also due out for France, Germany, and the Eurozone.

Barring marked revisions to prelims, expect Italy’s services PMI and the Eurozone’s composite PMI to be key.

From the U.S, ADP employment change figures will also influence along with finalized service sector PMI numbers.

Away from the economic calendar, COVID-19 news will need continued monitoring, however. While it has been a bullish start to the year, downside risks remain over the Omicron strain and vaccine efficacies.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 19 points.

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

Apple retreats again, after valuation tops $3 trillion again

By Medha Singh and Noel Randewich

(Reuters) – Apple Inc’s stock market value peaked on Tuesday for a second day above a $3 trillion, but the iPhone maker’s shares again failed hold that gain by the session’s end.

Apple shares ended down 1.3% at $179.70, leaving its market capitalization at $2.95 trillion.

On Monday, Apple’s stock market value rose briefly above $3 trillion for the first time ever, and it repeated that again on Tuesday before losing ground. The world’s most valuable company has yet to end a session at that level.

Apple accounts for nearly 7% of S&P 500 index’s value, according to Refinitiv data, the highest for a single stock in the index at a time when the benchmark is perched at a peak.

Surging demand for iPhones, MacBooks and iPads during the pandemic helped push the Cupertino, California company’s market capitalization past $2 trillion in August 2020.

“Apple has been one of the key pandemic trades for a lot of people and as we exit the pandemic. … the iPhone maker is going to struggle a little bit,” warned Edward Moya, senior market analyst at Oanda in New York.

Apple’s massive share repurchases in recent years have also fueled its stock rally.

The company has bought back $348 billion worth of shares in the five years through the September quarter of 2021, reducing its share count by 23% over that period, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

“You know there’s going to be buying,” Silverblatt said. “From an investor point of view, it’s very important.”

With Tesla now the world’s most valuable automaker as Wall Street bets heavily on electric cars, many investors expect Apple to launch its own vehicle within the next few years as it looks to reduce its current reliance on iPhones for about half of its revenue.

Notably, Apple is worth more than any of Europe’s main regional indexes including Britain’s FTSE 100, France’s CAC 40, Germany’s DAX, Spain’s IBEX 35 and Italy’s FTSE MIB.

Apple’s stock is now up 1% in 2022 after gaining 34% last year. It is trading at about 31 times expected 12-month earnings, which is expensive compared to its five-year average of 20 times expected earnings, according to Refinitiv data.

(Reporting by Medha Singh and Bansari Mayur Kamdar in Bengaluru, additional reporting by Julien Ponthus in London, Caroline Valetkevitch in New York and Noel Randewich in Oakland, California; Editing by Sriraj Kalluvila)

European Equities: Another Busy Economic Calender to Provide Direction

Economic Calendar

Tuesday, 4th January

German Retail Sales (MoM) (Nov)

French CPI m/m (Dec) Prelim

French HICP m/m (Dec) Prelim

German Unemployment Change (Dec)

German Unemployment Rate (Dec)

Wednesday, 5th January

Spanish Services PMI (Dec)

Italian Services PMI (Dec)

French Services PMI (Dec) Final

German Services PMI (Dec) Final

Eurozone Markit Composite PMI (Dec) Final

Eurozone Services PMI (Dec) Final

Thursday, 6th January

German Factory Orders (MoM) (Nov)

IHS Markit Construction PMI (Dec)

German CPI (MoM) (Dec)

Friday, 7th January

German Industrial Production (MoM) (Nov)

German Trade Balance (Nov)

French Consumer Spending (MoM) (Nov)

Eurozone CPI (YoY) (Dec) Prelim

Eurozone Retail Sales (MoM) (Nov)

The Majors

It was a bullish start to the year for the European majors, with the CAC40 and DAX30 rising by 0.90% and by 0.86% respectively. The EuroStoxx600 ended the day up by 0.45%.

A busy economic calendar distracted the markets from COVID-19 stats from the weekend. A continued rise in new cases failed to raise question markets over the resilience over the economic recovery. PMI numbers from the Eurozone provided strong support, with sub-components of the PMIs also market positive.

Away from the economic calendar, continued reports of the Omicron strain being milder was key to the bullish start.

The Stats

Manufacturing PMI figures for Italy and Spain were in focus. Finalized manufacturing PMIs for France, Germany, and the Eurozone also drew interest, however.

Member State Manufacturing PMIs

Spain’s Manufacturing PMI fell from 57.1 to 56.2 in December, which was in line with forecasts.

In December, Italy’s Manufacturing PMI declined from 62.8 to 62.0. Economists had forecast for the PMI to fall to 61.5.

According to finalized figures:

France’s Manufacturing PMI slipped from 55.9 to 55.6, which was up from a prelim 54.9.

In November, Germany’s Manufacturing PMI held steady at 57.4, which was down from a prelim 57.9.

The Eurozone

According to finalized figures, the Eurozone’s Manufacturing PMI fell from 58.4 to a 10-month low 58.0 in December, which was in line with prelim.

According to the December survey,

  • Average lead times lengthened to the softest extent since February.
  • As a result of easing supply chain issues, firms added purchases to their inventories at the fastest pace ever recorded.
  • In spite of this, output growth remained unchanged.
  • Input cost and output price inflation eased, though remained among the fastest ever seen by the survey.
  • New manufacturing orders increased at the joint-weakest rate since January as a result of weaker overseas demand.
  • Rising outstanding work led to a pickup in the pace of hiring.

By Country,

  • Italy ranked 1st, with a 2-month low PMI of 62.0, followed by Greece (59.0).
  • France sat at the bottom of the table with a 2-month low PMI of 55.6.
  • Spain’s PMI fell to a 10-month low 56.2 to sit just above France.

From the U.S

In December, the U.S Manufacturing PMI fell from 58.3 to 57.7 versus a prelim 57.8.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Monday. BMW and Continental both ended the day up by 3.21% respectively. Daimler and Volkswagen saw more modest gains of 1.64% and 1.87% respectively.

It was also a bullish day for the banks. Deutsche Bank rose by 3.00%, with Commerzbank rallying by 4.51%.

From the CAC, it was a bullish day for the banks. BNP Paribas rose by 0.71%, with Credit Agricole and Soc Gen ending the day up by 1.50% and by 0.83% respectively.

The French auto sector also had a bullish session. Stellantis NV and Renault saw gains of 3.85% and 2.85% respectively.

Air France-KLM found much-needed support, rallying by 4.88%, with Airbus SE rising by 3.36%

On the VIX Index

It was a 2nd consecutive day in the red for the VIX on Monday, marking an 8th loss in 9-sessions.

Following a 0.63% decline on Friday, the VIX fell by 3.60% to end the day at 16.60.

The NASDAQ rose by 1.20%, with the Dow and the S&P500 gaining 0.68% and 0.64% respectively.

VIX 040122 Daily Chart

The Day Ahead

It’s another busy day ahead on the Eurozone’s economic calendar. French inflation figures and German retail sales and unemployment numbers will be in focus early in the session.

While the unemployment numbers are key, expect plenty of interest in retail sales and inflation.

Ahead of the European open, manufacturing PMI numbers from China will set the tone.

From the U.S, the market’s preferred ISM Manufacturing PMI and JOLT’s job openings will also influence late in the session.

Away from the economic calendar, COVID-19 news will need continued monitoring, however.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 6 points, with the DAX down by 19 points.

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

European Equities: Futures Point Northwards ahead of Private Sector PMIs

Economic Calendar

Monday, 3rd January

Spanish Manufacturing PMI (Dec)

Italian Manufacturing PMI (Dec)

French Manufacturing PMI (Dec) Final

German Manufacturing PMI (Dec) Final

Eurozone Manufacturing PMI (Dec) Final

Tuesday, 4th January

German Retail Sales (MoM) (Nov)

French CPI m/m (Dec) Prelim

French HICP m/m (Dec) Prelim

German Unemployment Change (Dec)

German Unemployment Rate (Dec)

Wednesday, 5th January

Spanish Services PMI (Dec)

Italian Services PMI (Dec)

French Services PMI (Dec) Final

German Services PMI (Dec) Final

Eurozone Markit Composite PMI (Dec) Final

Eurozone Services PMI (Dec) Final

Thursday, 6th January

German Factory Orders (MoM) (Nov)

IHS Markit Construction PMI (Dec)

German CPI (MoM) (Dec)

Friday, 7th January

German Industrial Production (MoM) (Nov)

German Trade Balance (Nov)

French Consumer Spending (MoM) (Nov)

Eurozone CPI (YoY) (Dec) Prelim

Eurozone Retail Sales (MoM) (Nov)

The Majors

It was a bearish end to the year for the European majors, with the CAC40 and EuroStoxx600 falling by 0.28% and by 0.04% respectively. Germany’s DAX30 was closed for the holidays.

There were no major stats from the Eurozone or the U.S to influence the majors on the day. Economic data from China failed to impress despite better-than-expected figures.

In December, China’s NBS Manufacturing PMI increased from 50.1 to 50.3 versus a forecasted 50.0. The NBS Non-Manufacturing PMI rose from 52.3 to 52.7.

While continued news reports of fewer COVID-10 hospitalizations were market positive, the upward trend in new cases weighed on the majors.

The Stats

There were no major stats from the Eurozone.

From the U.S

There were also no major stats from the U.S to influence late in the European session.

The Market Movers

From the CAC, it was a mixed day for the banks. BNP Paribas rose by 0.16%, while Credit Agricole and Soc Gen ended the day down by 0.43% and by 0.12% respectively.

The French auto sector also had a mixed session. Stellantis NV fell by 0.10%, while Renault rallied by 1.48%.

Air France-KLM took yet another hit, falling by 0.13%, with Airbus SE ending the day down by 0.28%.

On the VIX Index

It was back into the red for the VIX on Friday, marking a 7th loss in 8-sessions.

Partially reversing a 2.24% rise from Thursday, the VIX slipped by 0.63% to end the day at 17.22.

The NASDAQ fell by 0.61%, with the Dow and the S&P500 declining by 0.16% and by 0.26% respectively.

VIX 030122 Daily Chart

The Day Ahead

It’s a particularly busy day ahead on the Eurozone’s economic calendar. Manufacturing sector PMIs for Italy and Spain will be in focus. Finalized manufacturing PMIs for France, Germany, and the Eurozone are also due out. Barring revisions from prelims, however, expect Italy and the Eurozone’s PMIs to be key.

From the U.S, December’s finalized Markit Manufacturing PMI will also be in focus late in the European session. Barring a marked upward revision, however, we don’t expect too much influence from the finalized numbers.

Away from the economic calendar, COVID-19 news will need continued monitoring, however.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 124 points with the DAX up 24 points.

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