European Equities: Service Sector PMIs and Brexit in Focus

Economic Calendar:

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 mixed day for the European majors on Wednesday, following Monday’s gains. The DAX30 and EuroStoxx600 fell by 0.52% and by 0.05% respectively, while the CAC40 ended the day up by 0.02%.

For the majors, concerns over a lack of progress towards Brexit pegged the majors back on the day. Also weighing on the majors and the DAX30, in particular, was news that the Democrats would retain the phase 1 trade agreement with China near-term.

There were positives, however, that provided support. News of the UK approving the BioNTech/Pfizer.inc vaccine delivered support, as did Joe Biden talk of a COVID-19 stimulus package.

According to reports on Wednesday, the President-Elect stated that delivering a COVID-19 stimulus package was an immediate priority.

The Stats

It was a relatively busy day on the Eurozone economic calendar. German retail sales figures for October were in focus going into the European open.

According to Destatis, retail sales rose by 2.6% in October, reversing a 1.9% slide in September. Economists had forecast a 1.2% rise.

  • Compared with the same month a year ago, retail sales were up by 8.2%.
  • Supermarket, self-service department shops, and hypermarket sales were up by 7.9%, year-on-year.
  • In the non-food retail sector, sales rose by 9.0%.
  • When compared with February 2020, the pre-COVID-19 pandemic month, retail sales rose by 5.9%.

Unemployment numbers from Spain and the Eurozone released later in the day had a muted impact on the majors.

In Spain, the unemployment rose by 25.3k in September, following a 49.6k jump in August.

For the Eurozone, the unemployment rate slipped from an upwardly revised 8.5% to 8.4% in October. Economists had forecast an unemployment rate of 8.4%.

According to Eurostat,

  • While down from 8.5% in September, unemployment was up from 7.4% in October 2019.
  • Compared with September 2020, Eurostat estimates that the number of unemployed persons fell by 91,000.
  • By contrast, however, the number of unemployed persons increased by 2.186 million when compared with October 2019.

From the U.S

ADP non-farm employment change figures were in focus late in the day.

In November, nonfarm employment increased by 307k, falling short of a forecasted 410k increase. In October, nonfarm employment had increased by 365k.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. Continental slid by 1.56%, with BMW and Volkswagen falling by 0.39% and by 0.44% respectively. Daimler rose by 0.24%, however, to buck the trend on the day.

It was a bullish day for the banks. Deutsche Bank rose by 0.90%, with Commerzbank ending the day up by 1.81%.

From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole rose by 1.69% and by 1.67% respectively, with Soc Gen gaining 2.10%.

It was a mixed day for the French auto sector, however. Peugeot fell by 0.79%, while Renault rose by 1.45%.

Air France-KLM slipped by 0.85%, while Airbus SE rose by 2.15%, following Tuesday’s 1.90% gain.

On the VIX Index

It was a 2nd consecutive day in the green for the VIX, after having fallen for 5 consecutive days. Following on from Tuesday’s 0.97% gain, the VIX rose by 1.93% to end the day at 21.17.

Disappointing ADP nonfarm figures had limited impact, while plans to retain the phase 1 trade agreement with China was market negative. On the positive, however, remained progress towards a COVID-19 vaccine and hopes of a stimulus package to support the U.S economy.

For the U.S markets, it was a mixed day after Tuesday’s gains and last month’s rally. The Dow and S&P500 rose by 0.20% and by 0.18% respectively, while the NASDAQ slipped by 0.05%.

VIX 031220 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. Key stats include services and composite PMI numbers for Italy and Eurozone retail sales figures.

Finalized services and composite PMI figures for November are also due out for France, Germany, and the Eurozone.

We would expect the Eurozone’s composite and services PMI to have the greatest impact on the majors.

From the U.S, the all-important ISM services PMI and weekly jobless claims figures will also influence later in the day.

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

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 18 points.

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

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.

European Equities: A Month in Review – November 2020

The Majors

It was a particularly bullish month for the European majors in November, with COVID-19 vaccine news delivering a much-needed bounce.

After 2 consecutive months in the red, the CAC40 surged by 20.12%. The DAX30 and the EuroStoxx600 weren’t far behind, with gains of 15.01% and 13.73% respectively. For the DAX30, November’s gains reversed losses from the year to move into positive territory year-to-date. The CAC40 and EuroStoxx600 still have some way to go in order to reverse losses from earlier in the year, however.

While the news of a COVID-19 vaccine drove demand for riskier assets, Joe Biden’s victory in the Presidential Election added support for riskier assets.

On the negative side, however, was a reintroduction of lockdown measures by member states including France and Germany.

Towards the end of the month, the COVID-19 numbers reflected the effect of the lockdown measures.

In France, the number of new COVID-19 cases and hospitalizations were in decline allowing the government to ease lockdown measures going into December.

On the geopolitical risk front, last-ditch Brexit negotiations failed to deliver a deal, which left the majors in the red at the end of the month.

The Stats

It was a busy month on the Eurozone economic calendar. Looking at the private sector PMIs, it was a disappointing set of numbers for November.

Service sector activity contracted in France, Germany, and across the Eurozone as a result of a reintroduction of containment measures.

France’s services sector suffered the most, with the PMI tumbling from 46.5 to 38.0. With Germany’s Services PMI falling to 46.2, the Eurozone’s Services PMI fell from 46.9 to 41.3.

While Germany’s manufacturing sector avoided a contraction, sector activity in France contracted. The PMI fell from 51.3 to 49.1, dragging the Eurozone’s Composite PMI down from 50.0 to 45.1.

In spite of the disappointing numbers, hopes of a COVID-19 vaccine fuelled economic recovery fuelled muted the effect of the PMIs.

Other stats were mixed in the month.

Consumer and business sentiment weakened in October as a result of the 2nd wave of the pandemic and lockdown measures.

Germany’s ZEW Economic Sentiment Indicator fell from 52.3 to 32.8, with the Ifo Business Climate Index falling from 92.5 to 90.7.

Things were not much better on the consumer confidence front. The GfK Consumer Climate Indicator fell from -3.2 to -6.7.

For the Eurozone, consumer confidence also waned, with the Eurozone Consumer Confidence Index falling from -15.5 to -17.6.

On the positive front, however, were 3rd quarter GDP numbers for France, Germany, and the Eurozone. The respective economies had made progress in recovering from the 2nd quarter economic meltdown before November’s lockdown measures.

From the U.S

Labor market stats pointed to a stalling in the labor market recovery. Initial jobless claims inched up to 778k after having eased down to 709k in the 1st week of November.

While new COVID-19 cases surged across the U.S and a number of states reintroduced containment measures, COVID-19 vaccine news eased any market tensions in the month.

As a result of the jump in COVID-19 cases, consumer confidence softened in November. The CB Consumer Confidence Index fell from 101.4 to 96.1, with the Michigan Consumer Sentiment Index falling from 77.0 to 76.9.

On the positive, however, were private sector PMIs. Both the manufacturing and services sectors saw activity pick up in November.

In November, the Markit Manufacturing PMI rose from 53.4 to 56.7, with the Services PMI rising from 56.9 to 57.7.

The divergence from the Eurozone stemmed from a decision by the U.S administration to keep the economy running.

Monetary Policy

The ECB monetary policy meeting minutes, Economic Bulletin, and Financial Stability Review talked of doom and gloom.

From the minutes and other ECB reports and from ECB President Lagarde commentary, the markets are expecting further policy easing, however.

While the ECB minutes stated that there should be no commitments made, the 2nd wave COVID-19 pandemic is likely to force the ECB’s hands. It remains to be seen how far the ECB will go with a COVID-19 vaccine on the horizon.

From the FED, the FOMC meeting minutes also provided few surprises. Both central banks were focused on the effects of COVID-19 on their respective economies.

The respective minutes followed decisions by both to keep rates unchanged in the month.

The Market Movers

For the DAX: It was a bullish month for the auto sector in November. Daimler surged by 26.99%, with BMW and Continental jumping by 23.99% and by 24.73% respectively. Volkswagen trailed with a 12.52% gain in the month.

It was also a bullish month for the banks. Deutsche Bank rallied by 17.04%, with Commerzbank ending the month up by an impressive 28.8%.

From the CAC, it was a particularly bullish month for the banking sector. BNP Paribas surged by 43.95%, with Credit Agricole and Soc Gen ending the month with gains of 42.63% and 43.38% respectively.

It was also a bullish month for the auto sector. Peugeot rose by 28.06%, with Renault jumping by 56.94%.

Supported by COVID-19 vaccine news, however, it was Air France-KLM that impressed the most with a 77.94% rebound. Airbus SE also impressed, surging by 40.17%.

On the VIX Index

It was back into the red for the VIX in November, ending a run of 2 consecutive monthly gains. Reversing a 44.18% surge in October, the VIX tumbled by 45.90% to end the month at 20.57.

The downside for the VIX came as pharmas released impressive COVID-19 phase 3 clinical trial results. Talk of a vaccine being available by mid-December supported riskier assets, which sank the VIX.

In November, the Dow and NASDAQ rallied by 11.84% and by 11.80% respectively, with the S&P500 ending the month up by 10.75%.

VIX November Monthly Chart

The Month Ahead

We can expect another busy month ahead on the Eurozone economic calendar. Much of the economic data, however, will likely take a backseat in the month ahead.

We would expect COVID-19 vaccine updates and any progress towards a COVID-19 stimulus package on Capitol Hill to be key drivers.

On the geopolitical front, there’s also Brexit for the markets to consider. In late November, last-ditch talks failed to deliver an agreement. The two sides have just one month left until the end of the transition period.

Key stats that will draw interest, however, will include private sector PMIs for December, unemployment figures, and consumer and business sentiment numbers.

From the U.S, private sector PMIs, labor market numbers, and consumer confidence and spending will also influence.

There are also stats out of China that will need to continue reflecting China’s post-pandemic economic recovery.

European Equities: The Futures Point South, with Stats on the Quieter Side

Economic Calendar:

Monday, 30th November

Spanish CPI (YoY) Prelim

Spanish HICP (YoY) (Nov) Prelim

Italian CPI (MoM) (Nov) Prelim

German CPI (MoM) (Nov) Prelim

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 bullish end to the week for the European majors on Friday. The CAC40 rose by 0.56%, with the DAX 30 and the EuroStoxx600 ending the day with gains of 0.37% and 0.41% respectively.

Following a mid-week blip stemming from concerns over the state of the economy, the markets returned attention to vaccine news.

With the markets expecting a vaccine to become available by mid to late December, expectations of an economic rebound in early 2021 supported riskier assets.

News of easing restrictions also provided support. The CAC40 was the main beneficiary, which found additional support from news of falling new cases and hospitalizations in France.

The Stats

It was a relatively busy day on the Eurozone economic calendar. Finalized 3rd quarter GDP, October consumer spending, and prelim November inflation figures from France were in focus.

The stats were skewed to the positive, providing the CAC40 with support through the early part of the session.

Consumer spending jumped by 3.7%, reversing most of a 4.4% slide from September. Consumer prices and the harmonized index of consumer prices both increased by 0.2% following a flat October. And finally, the French economy expanded by 18.7% in the 3rd quarter, which was revised up from a prelim 18.2%.

From the U.S

There were no material stats with the U.S markets on a half-day for Thanksgiving.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. BMW and Volkswagen fell by 0.83% and by 1.69% respectively. Continental and Daimler saw relatively more modest gains of 0.51% and 1.09% respectively, however.

It was a bullish day for the banks. Deutsche Bank and Commerzbank saw gains of 1.20% and 1.85% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas rose by 1.06%, with Credit Agricole and Soc Gen seeing more modest gains of 0.37% and 0.80% respectively.

It was also a bullish day for the French auto sector. Peugeot and Renault ended the day with gains of 1.14% and 1.37% respectively.

Air France-KLM continued to find support, rallying by 4.82%, with Airbus SE eking out a 0.22% gain.

On the VIX Index

It was a 4th consecutive day in the red for the VIX on Friday. Following a 1.80% decline on Wednesday, the VIX fell by 1.93% to end the day at 20.84. Thursday was a public holiday in the U.S.

On Friday, the Dow and S&P500 saw gains of 0.13% and by 0.24% respectively, with the NASDAQ rising by 0.92%.

VIX 301120 Daily Chart

The Day Ahead

It’s a relatively busy day ahead on the Eurozone economic calendar. Prelim November inflation figures are due out from Spain, Italy, and Germany.

The numbers are unlikely to have a material impact on the European majors, with further ECB policy easing priced in.

From the U.S, Chicago PMI and pending home sales are due out. Expect the Chicago PMI to have a greater influence late in the session.

NBS private sector PMIs from China due out ahead of the European open will set the tone.

Away from the economic calendar, updates from Brexit negotiations from the weekend and COVID-19 news updates will also influence.

The Futures

In the futures markets, at the time of writing, the DAX was down by 63 points, with the Dow down by 112 points.

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

The Week Ahead – Economic Data, COVID-19 Vaccine Updates, and Brexit in Focus

On the Macro

It’s a particularly busy week ahead on the economic calendar, with 88 stats in focus in the week ending 4th December. In the week prior, 50 stats had been in focus.

For the Dollar:

It’s a busy week ahead on the economic data front.

In the 1st half of the week, the market’s preferred ISM Manufacturing PMI and ADP Nonfarm Employment Change figures are due out.

With plenty of focus on labor market conditions, the ADP figures could overshadow the ISM numbers.

On Thursday, however, both the initial jobless claims and the ISM Non-Manufacturing PMIs will draw plenty of attention.

At the end of the week, nonfarm payrolls and November’s unemployment rate will provide riskier assets with direction.

Weak numbers could force the FED into action should lawmakers continue to grapple over a stimulus package.

Away from the economic calendar, COVID-19 and U.S politics will continue to remain the key drivers, however.

The Dollar Spot Index ended the week down by 0.65% to 91.790.

For the EUR:

It’s a busy week ahead on the economic data front.

Private sector PMIs for Spain and Italy and finalized PMIs for France, Germany, and the Eurozone are due out.

On Tuesday, German unemployment figures will also be in focus alongside the manufacturing numbers.

Mid-week, German retail sales figures are due out ahead of German factory order numbers on Friday.

Other stats in the week include prelim November inflation and Eurozone unemployment and retail sales figures.

These numbers are unlikely to have a muted impact on the EUR, however.

Away from the economic calendar, COVID-19 news updates will remain a key driver in the week. Expect Brexit to also influence…

The EUR ended the week up by 0.89% to $1.1963.

For the Pound:

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

Finalized private sector PMIs are due out on Tuesday and Thursday, with November’s construction PMI on Friday.

Barring any downward revisions, however, the stats are likely to have a muted impact on the Pound.

Sentiment towards Brexit and COVID-19 will remain the key drivers in the week.

The Pound ended the week up by 0.27% to $1.3311.

For the Loonie:

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

In the 1st half of the week, 3rd quarter and October GDP and RMPI numbers are in focus. Expect the GDP numbers to have the greatest impact.

The focus will then shift to trade and employment figures due out on Friday. Expect the employment numbers to have the greatest impact at the end of the week.

From elsewhere, private sector PMIs numbers from China, the Eurozone, and the U.S will also provide direction.

Away from the calendar, COVID-19 vaccine news and stimulus talk from Capitol Hill will also influence.

The Loonie ended the week up by 0.81% to C$1.2989 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

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

AIG manufacturing index figures are due out ahead of 3rd quarter GDP numbers on Wednesday.

The focus will then shift to trade data and retail sales figures due out on Thursday and Friday.

On the monetary policy front, the RBA policy decision on Tuesday will also draw plenty of attention. While the markets are expected rates to be left unchanged, there could be the talk of further support via its bond-buying program.

From elsewhere, private sector PMI numbers from China will also influence.

Away from the economic calendar, COVID-19 news will continue to provide direction. U.S politics could also play a role should lawmakers make progress towards a stimulus package.

The Aussie Dollar ended the week up by 1.16% to $0.7387.

For the Kiwi Dollar:

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

November business confidence figures at the start of the week will draw interest. With the RBNZ assuring continued support disappointing numbers would test Kiwi Dollar support.

Late in the week, building consent figures for October would likely have a muted impact on the Kiwi.

From elsewhere, private sector PMI numbers from China will also provide direction in the week ahead.

The Kiwi Dollar ended the week up by 1.41% to $0.7027.

For the Japanese Yen:

It is a relatively quiet week on the economic calendar.

October industrial production and retail sales figures are due out on Monday. Both sets of numbers will be of interest, though the impact on the Yen will likely be limited.

The focus will then shift to finalized manufacturing and services PMIs are due out on Tuesday and Thursday.

Barring marked deviation from prelim figures, however, the markets will likely brush aside the numbers.

From elsewhere, economic data from China will influence.

Away from the economic calendar, any further positive updates on COVID-19 vaccines would likely ease demand for the Yen.

The Japanese Yen ended the week down by 0.22% to ¥104.09 against the U.S Dollar.

Out of China

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

Private sector PMI numbers for November are due out in the week. The market’s preferred Caixin Manufacturing PMI on Tuesday will likely have the greatest impact.

Economic data from China has continued to impress. Any disappointing numbers would test market risk appetite early in the week.

The Chinese Yuan ended the week down by 0.23% to CNY6.55781 against the U.S Dollar.

Geo-Politics

U.S Politics

Following last week’s Thanksgiving holidays, the markets will look towards Capitol Hill. There will be two areas of focus. Firstly, any government interventions to curb the spread of the COVID-19 pandemic and, secondly, stimulus talks.

A failure to make progress on stimulus and reintroduction of lockdown measures would be the worst-case scenario for riskier assets.

Brexit

For the Pound and the UK economy, Brexit remains a key driver. Talks resumed on the weekend and time is rapidly running out.

With U.S President-Elect Biden also getting involved, the markets are hoping for an imminent deal.

The Weekly Wrap – COVID-19 Vaccine News Supported Riskier Assets in the Week

The Stats

It was a quieter week on the economic calendar, in the week ending 27th November.

A total of 50 stats were monitored, following 62 stats from the week prior.

Of the 50 stats, 25 came in ahead of forecasts, while 21 economic indicators came up short of forecasts. 4 stats were in line with forecasts in the week.

Looking at the numbers, 16 of the stats reflected an upward trend from previous figures. Of the remaining 35 stats, 31 reflected a deterioration from previous.

For the Greenback, it was a 2nd consecutive week in the red. The Dollar Spot Index fell by 0.65% to 91.790. In the week prior, the Dollar had fallen by 0.39% to 92.392.

Hopes of a COVID-19 vaccine before the end of the year provided riskier assets with support in the week. Softer demand for the Greenback came in spite of disappointing economic data from the U.S and the continued rise in new COVID-19 cases.

Out of the U.S

It was a busy week on the economic data front.

In the 1st half of the week, prelim private sector PMI numbers for November impressed. The all-important services PMI rose from 56.9 to 57.7, with the manufacturing PMI climbing from 53.4 to 56.7.

Consumer sentiment waned in November, however, with the CB Consumer Confidence Index falling from 101.4 to 96.1. This was to be expected, with the latest spike in new COVID-19 cases and dire labor market conditions.

Mid-week, the weekly jobless claims, core durable goods orders, 3rd quarter GDP, and personal spending figures were in focus.

The stats were mixed. Initial jobless claims rose from 742k to 778k in the week ending 20th November. The latest figure further confirmed that the labor market recovery had stalled.

Core durable goods orders impressed with a 1.3% rise in October, with personal spending rising by 0.5% to come in ahead of forecasts. Spending was down from a 1.2% rise in September, however.

2nd estimate GDP numbers for the 3rd quarter were in line with 1st estimates, which came up short of a forecasted upward revision.

Other stats ahead of the Thanksgiving holidays included finalized consumer sentiment and inflation figures.

The Michigan Consumer Sentiment Index came in at 76.9, down from a prelim 77.0. Of greater significance was softer inflationary pressures in October. The annual rate of inflation eased from 1.6% to 1.4%.

On the monetary policy front, the FOMC meeting minutes had a muted impact. The FED focus on the COVID-19 pandemic was somewhat dated following the latest COVID-19 vaccine updates.

In the equity markets, the NASDAQ rose by 2.96%, while the Dow and S&P500 gaining 2.21% and 2.27% respectively.

Out of the UK

It was a relatively quiet week on the economic data front.

Prelim private sector PMI numbers for November were in focus at the start of the week.

It was a mixed bag, with manufacturing sector activity seeing a pickup, while the services sector contracted.

The all-important services PMI slid from 52.3 to 45.8 as lockdown measures hit the sector.

Away from the economic calendar, the Pound did find some support on hopes of an imminent Brexit deal, however.

In the week, the Pound rose by 0.27% to $1.3311. In the week prior, the Pound had risen by 0.65% to $1.3275

The FTSE100 ended the week up by 0.25%, following on from a 0.56% gain in the previous week.

Out of the Eurozone

It was a busy week on the economic data front.

Prelim private sector PMIs for France, Germany, and the Eurozone were in focus at the start of the week.

With lockdown measures in place, the services sector took a hit, with the Eurozone Services PMI falling from 46.9 to 41.3.

Eurozone manufacturing sector activity eased as a result of a contraction in France, while Germany continued to report solid growth in the sector.

On Tuesday, the focus shifted to Germany. Finalized 3rd quarter GDP and November’s IFO Business Climate figures were in focus.

While an upward revision to 3rd quarter GDP numbers was positive, a slide in business sentiment disappointed. The Ifo Business Climate Index fell from 92.5 to 90.7.

The markets were expecting a deterioration in sentiment, however, which limited the impact on the EUR.

In the 2nd half of the week, Germany’s GfK Consumer Climate indicator reflected consumer sentiment towards the COVID-19 pandemic. A reintroduction of containment measures dragged the headline indicator down from -3.2 to -6.7.

From France, finalized 3rd quarter GDP, October consumer spending, and prelim inflation figures for November were in focus on Friday.

Consumer spending and inflation were the main areas of focus, with the markets less interested in 3rd quarter numbers in spite of an upward revision to 18.7%.

The stats were skewed to the positive, with consumer spending jumping by 3.7%, following a 4.4% slide in September.

Consumer prices were also on the rise. In November, consumer prices rose by 0.2%. Prices had been flat in October.

From the ECB, November’s financial stability review and monetary policy meeting minutes delivered a grim view. There was EUR resilience, however, coming from progress towards a COVID-19 vaccine.

For the week, the EUR rose by 0.89% to $1.1963. In the week prior, the EUR had risen by 0.19% to $1.1857.

For the European major indexes, it was another bullish week. The CAC40 rose by 1.86%, with the DAX30 and EuroStoxx600 gaining 1.51% and 0.93% respectively.

For the Loonie

It was a particularly quiet week on the economic data front.

There were no material stats to provide direction. The lack of stats left the Loonie in the hands of COVID-19 news updates and crude oil inventory numbers.

In the week ending 27th November, the Loonie rose by 0.81% to C$1.2989. In the week prior, the Loonie had risen by 0.32% to C$1.3095.

Elsewhere

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

In the week ending 27th November, the Aussie Dollar rose by 1.16% to $0.7387, with the Kiwi Dollar rallying by 1.41% to end the week at $0.7027.

For the Aussie Dollar

It was a relatively quiet week on the economic calendar.

Key stats included 3rd quarter construction work down and new capital expenditure figures.

The stats were skewed to the negative, with both taking a larger hit than expected in the quarter.

While the stats were disappointing, hopes of a COVID-19 vaccine by the end of the year delivered support.

For the Kiwi Dollar

It was a busier week on the economic calendar.

3rd quarter retail sales and October trade figures were in focus, with both sets of numbers beating forecasts.

Retail sales surged by 28%, reversing a 14.6% slide from the 2nd quarter, with the annual trade deficit widening to a 28-year high NZ$2,190m.

From the RBNZ, November’s Financial Stability report also delivered support to the Kiwi Dollar, while risks remained tilted to the downside.

For the Japanese Yen

It was a quiet week on the economic calendar.

November inflation figures at the end of the week failed to move the dial. A pickup in deflationary pressures was aligned with the market outlook. Tokyo’s core consumer prices fell by 0.7%, following a 0.5% decline in October.

While the inflation figures disappointed, updates on the COVID-19 vaccine eased demand for the Yen.

The Japanese Yen fell by 0.22% to ¥104.09 against the U.S Dollar. In the week prior, the Yen had risen by 0.74% to ¥103.86.

Out of China

It was a particularly quiet week on the economic data front.

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

In the week ending 27th November, the Chinese Yuan fell by 0.23% to CNY6.5781. The Yuan had risen by 0.66% to CNY6.5630 in the week prior.

The CSI300 rose by 0.76%, with the Hang Seng ended the week up by 1.68%.

European Equities: A Week in Review – 27/11/20

The Majors

It was another bullish week for the European majors in the week ending 27th November.

The CAC40 rose by 1.86% to lead the way, with the DAX30 and EuroStoxx 600 gaining 1.51% and 0.93% respectively.

Through the week, market reaction to positive COVID-19 vaccine news delivered support. Pfizer Inc. and BioNTech announced that a vaccine would be available in a matter of days after FDA approval.

The news of an imminent vaccine allowed investors to focus on an economic recovery rather than economic damage caused by the COVID-19 pandemic.

Mid-week, however, disappointing economic data from the U.S and doom and gloom from the ECB did pin the majors back.

At the end of the week, however, the focus returned to the COVID-19 vaccine, which supported a bullish end to the week.

The Stats

It was a busy week on the economic calendar.

At the start of the week, private sector PMI numbers disappointed. While Germany continued to see growth, numbers from France were particularly disappointing.

Weaker numbers led to a fall in the Eurozone’s composite PMI from 50 to 45.1, with service sector numbers doing the damage.

From Germany, 3rd quarter GDP numbers came in ahead of prelim figures, though had a muted impact.

With containment measures in place, a slide in business and consumer sentiment were negatives in the week.

At the end of the week, stats from France wrapped things up.

French consumer spending, inflation, and finalized 3rd quarter GDP numbers were in focus. The stats were all skewed to the positive providing support.

In October, consumer spending rose by 3.7%, reversing most of a 4.4% decline from September, with consumer prices on the rise in November.

Consumer prices rose by 0.2%, with the harmonized index for consumer prices also rising by 0.2%. Both had stalled in October.

For the French economy, the 3rd quarter GDP was revised up from 18.2% to 18.7%.

While the stats were positive, November’s private sector PMIs from earlier in the week supported the ECB’s plans to make a move next month.

From the ECB, November’s financial stability review and monetary policy meeting minutes pegged the majors back on Wednesday and Thursday. Doom and gloom and economic uncertainty ahead weighed on the COVID-19 vaccine optimism.

From the U.S

In the 1st half of the week, prelim private sector PMI numbers for November impressed. The all-important services PMI rose from 56.9 to 57.7, with the manufacturing PMI climbing from 53.4 to 56.7.

Consumer sentiment waned in November, however, with the CB Consumer Confidence Index falling from 101.4 to 96.1. This was to be expected, with the latest spike in new COVID-19 cases and dire labor market conditions.

Mid-week, the weekly jobless claims, core durable goods orders, 3rd quarter GDP, and personal spending figures were in focus.

The stats were mixed. Initial jobless claims rose from 742k to 778k in the week ending 20th November. The latest figure further confirmed that the labor market recovery had stalled.

Core durable goods orders impressed with a 1.3% rise in October, with personal spending rising by 0.5% to come in ahead of forecasts. Spending was down from a 1.2% rise in September, however.

2nd estimate GDP numbers for the 3rd quarter were in line with 1st estimates, which came up short of a forecasted upward revision.

On the monetary policy front, the FOMC meeting minutes had a muted impact. The FED focus on the COVID-19 pandemic was somewhat dated following the latest COVID-19 vaccine updates.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Continental and Daimler saw gains of 6.45% and 1.68% while BMW and Volkswagen fell by 1.08% and by 3.19% respectively.

It was a bullish week for the banking sector, however. Commerzbank rallied by 8.52%, with Deutsche Bank ending the week up by 5.33%.

From the CAC, it was another bullish week for the banks. BNP Paribas and Soc Gen rose by 7.03% and by 7.24% respectively, with Credit Agricole rallying by 10.17%.

The French auto sector found more support. Peugeot ended the week up by 3.09%, with Renault rallying by 10.60%.

COVID-19 vaccine news delivered yet more gains for Air France-KLM, which jumped by 27.78%, while Airbus saw a more modest 1.53% gain.

On the VIX Index

It was back into the red for the VIX, marking a 3rd weekly decline in 4-weeks. In the week ending 27th November, the VIX fell by 12.07%. Reversing a 2.60% gain from the previous week, the VIX ended the week at 20.84.

For the week, the NASDAQ rose by 2.96%, while the Dow and S&P500 seeing gains of 2.21% and 2.27% respectively.

VIX 281120 Weekly Chart

The Week Ahead

It’s another busy week ahead on the Eurozone economic calendar.

November private sector PMIs for Italy and Spain are in focus, along with finalized PMIs for France, Germany, and the Eurozone.

Expect Italy’s PMI and the Eurozone’s composite PMI to draw plenty of interest barring revisions to German and French PMIs.

From Germany, employment, retail sales, and factory orders for October will draw also interest in the week. With German manufacturing sector activity holdings its ground, expect the employment and retail sales figures to have the greatest impact.

Other stats include prelim inflation figures for November, which would likely have a muted impact on the majors.

From the U.S, the market’s preferred ISM private sector PMIs, weekly jobless claims, and nonfarm figures will influence.

Out of China, manufacturing sector PMI numbers due out on Monday and Tuesday will also provide direction.

Away from the economic calendar, COVID-19 news updates and Brexit talks will also need continued monitoring.

European Equities: Economic Data, COVID-19, and Brexit in Focus

Economic Calendar:

Friday, 27th November

French Consumer Spending (MoM) (Oct)

French CPI (MoM) (Nov) Prelim

French GDP (QoQ) (Q3) Final

French HICP (MoM) (Nov) Prelim

Eurozone Consumer Confidence Final

The Majors

It was a bearish day for the European majors on Thursday, though the losses were minor with the U.S markets closed. The EuroStoxx600 fell by 0.12%, with the DAX30 and the CAC40 declining by 0.02% and by 0.08% respectively.

Economic data from Germany and the ECB’s sentiment towards the Eurozone’s economic outlook pegged the majors back.

Mid-week, Germany announced plans to extend containment measures to further curb the spread of the coronavirus. While progress towards a COVID-19 vaccine remains positive for the markets, the economic damage stemming from the 2nd wave of the pandemic will need assessment.

The Stats

It was a quiet day on the Eurozone economic calendar. German consumer sentiment figures were in focus on the day.

In December, the GfK Consumer Climate Index fell from -3.1 to -6.7. Economists had forecast a rise to -2.5.

According to the GfK survey,

  • Sentiment in November took a hit as a result of the partial lockdown.
  • The shutdown of the hotel, restaurant, and events industry, as well as the tourism industry, weighed heavily on sentiment.
  • The economic expectation indicator fell by 7.3 points to -0.2, the lowest figure since -10.4 points in May.
  • Income expectations also took a hit, falling by 5.2 points to 4.6, with the propensity to buy indicator falling by 6.5 points to 30.5.

Monetary Policy

From the ECB, the monetary policy meeting minutes were in focus later in the day.

Some key points from the minutes included:

  • After a strong rebound in the summer, the euro area’s economic recovery was losing momentum.
  • The rise in COVID-19 cases and containment measures would restrict activity levels in high contact sectors.
  • There has been a clear deterioration in the near-term economic outlook as a result.
  • Household consumption is expected to remain subdued.
  • Increased uncertainty about the economic outlook and weaker balance sheets were weighing on business investment.
  • Headline inflation declined further to 0.3% in September, with inflation excluding energy and food falling to an all-time low of 0.2%.
  • The ECB expected headline inflation to remain negative through early 2021, longer than in the September baseline projection.
  • Risks surrounding the euro area growth outlook were clearly tilted to the downside.
  • The ECB held monetary policy unchanged ahead of a new round of macroeconomic projections due out in the coming weeks.
  • In December, it was felt necessary for a recalibration of all of its instruments, as appropriate, to ensure that financing conditions remain favorable to support the economic recovery. It was noted, however, that the ECB should not pre-commit itself to specific policy actions.
  • Finally, members agreed that an ambitious and coordinated fiscal stance remained critical and was the most effective policy to deal with the effects of the pandemic.

From the U.S

There were no material stats with the U.S markets closed for Thanksgiving.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. Daimler fell by 2.48%, with BMW and Volkswagen declining by 2.08% and by 2.18% respectively. Continental saw a more modest 1.35% loss on the day.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank fell by 1.58% and by 0.38% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole slipped by 0.89% and by 0.47% respectively. Soc Gen fell by 1.21%, however, to lead the way down.

It was also a bearish day for the French auto sector. Peugeot fell by 0.73, with Renault sliding by 2.32%.

Air France-KLM continued to find support, rising by 1.94%, while Airbus SE fell by a further 1.86% following Wednesday’s 2.14% slide.

On the VIX Index

The U.S markets were closed on Thursday for Thanksgiving.

The Day Ahead

It’s a relatively busy day ahead on the Eurozone economic calendar. French consumer spending for October and prelim inflation figures for November are due out. Finalized 3rd quarter GDP numbers are also due out on the day.

We would expect the markets to be relatively nonresponsive to the stats, however. The focus will be on COVID-19 news and Brexit news at the end of the week.

With progress made towards a COVID-19 vaccine, expectations are that containment measures will soon ease. This would support a pickup consumption and economic activity, limiting the impact of backward-looking data. The extent of the economic damage, however, will likely dictate the shape of any economic recovery.

Late in the session, Eurozone consumer confidence figures should also have a muted impact on the majors, barring any major revisions.

From the U.S, there are no material stats, with the U.S markets on a half-day for the Thanksgiving holidays.

Away from the economic calendar, expect COVID-19 news updates and Brexit to also influence.

The Futures

In the futures markets, at the time of writing, the DAX was down by 32 points.

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

European Equities: Brexit, Economic Data, and the ECB Minutes in Focus

Economic Calendar:

Thursday, 24th November

GfK German Consumer Climate (Dec)

ECB Publishes Account of Monetary Policy Meeting  

Friday, 25th November

French Consumer Spending (MoM) (Oct)

French CPI (MoM) (Nov) Prelim

French GDP (QoQ) (Q3) Final

French HICP (MoM) (Nov) Prelim

Eurozone Consumer Confidence Final

The Majors

It was a mixed day for the European majors on Wednesday. The CAC40 rose by 0.23%, while the DAX30 and the EuroStoxx600 slipped by 0.02% and by 0.08% respectively.

A planned easing of containment measures provided support to the European majors on the day. While Germany will reportedly allow gatherings for Christmas, France will begin to ease lockdown measures this weekend. The more aggressive plans to ease containment measures in France delivered the upside for the CAC40.

From the U.S, a continued surge in new COVID-19 cases and disappointing economic data weighed on the day, however.

The Stats

It was a quiet day on the Eurozone economic calendar. French jobseeker figures were in focus in the early part of the session.

In October, the total number of jobseekers decreased from 3,606.3k to 3,549.7k. Coupled with progress towards a COVID-19 vaccine, the numbers supported the CAC40.

From the ECB, the Financial Stability Review also failed to move the dial.

Salient points from the review included:

  • The coronavirus pandemic, and its impact on macroeconomic prospects as well as sovereign, corporate, and household balance sheets, continue to dominate the outlook for euro area financial stability.
  • Near-term financial stability risks are contained by massive policy impact. A premature end to schemes could challenge corporates and households, however.
  • Medium-term vulnerabilities have increased with rising debt burdens. Euro area banks, which have shown resilience so far, face a combination of growth asset quality concerns, persistent structural problems, and ongoing pressures on profitability.
  • Macroprudential policy must continue to focus on leaning against undue deleveraging, supporting capital buffer usability, and developing an effective framework for the non-bank financial sector.
  • The euro area economy faces a fragile and uneven recovery, notwithstanding considerable policy support.
  • Downside risks that remain include an adverse outcome of Brexit negotiations. On the plus, the availability of a vaccine in the near future may help the euro area return to pre-pandemic levels of economic activity faster.

From the U.S

It was a particularly busy day on the economic data front. Key stats included the weekly jobless claims, core durable goods, 3rd quarter GDP, and personal spending figures.

In the 3rd quarter, the economy expanded by 33.1%, according to the 2nd estimate figures. This was in line with the 1st estimate while coming up short of a forecasted 33.2%.

Core durable goods orders rose by 1.3% in October, following a 1.5% increase in September. Economists had forecast a 0.5% rise.

Personal spending followed a 1.2% increase in September with a 0.5% rise in October. Economists had forecast a 0.4% rise.

On the employment front, initial jobless claims stood at 778k in the week ending 20th November. This was up from the week prior’s 742k and was another signal that the labor market recovery was stalling.

The FED

From the FED, the FOMC meeting minutes were released after the European close, which was focused heavily on the effects of the COVID-19 pandemic.

Salient points from the Committee Policy Action section included:

  • Economic activity and employment had continued to recover but remained well below their levels at the beginning of the year.
  • Weaker demand and earlier declines in oil prices had been holding down consumer price inflation.
  • The FED was committed to using its full range of tools to support the U.S economy in this challenging time.
  • Members stated that the path of the economy would significantly depend on the course of the virus.
  • Additionally, members agreed that the ongoing health crisis would continue to weigh on economic activity, employment, and inflation in the near-term. This was posing considerable risks to the economic outlook over the medium-term.
  • Members expected to maintain an accommodative stance on monetary policy until inflation moved moderately above 2% and maximum employment was achieved.
  • Over the coming months, it would be appropriate for the FED to increase its holdings of Treasury Securities and agency MBS.
  • The FED would continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance on monetary policy as appropriate.
  • Considerations would include readings on public health, labor market conditions, inflation pressures, and expectations, and financial and international developments.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. Volkswagen slid by 2.43% to lead the way down, with BMW and Daimler seeing losses of 1.69% and 1.24% respectively. Continental ended the day down by a more modest 0.46%.

It was also a bearish day for the banks. Deutsche Bank fell by 1.06%, with Commerzbank sliding by 2.85%.

From the CAC, it was a relatively bullish day for the banks. Credit Agricole and Soc Gen rose by 0.53% and by 0.93% respectively. BNP Paribas eked out a 0.05% gain on the day.

It was also a bullish day for the French auto sector. Peugeot and Renault ended the day with gains of 0.63% and 0.22% respectively.

Air France-KLM followed Tuesday’s 11.07% surge with a 2.1% gain, while Airbus SE slid by 2.14%.

On the VIX Index

It was a 3rd consecutive day in the red for the VIX on Wednesday. Following a 4.50% decline on Tuesday, the VIX fell by 1.80% to end the day at 21.25.

The downside for the VIX came in spite of the Dow and S&P500 seeing red on Wednesday. Disappointing economic data from the U.S left the pair in the red for the day.

On Wednesday, the Dow and S&P500 fell by 0.58% and by 0.16% respectively, while the NASDAQ rose by 0.48%.

VIX 261120 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. German GfK Consumer Climate figures for December are due out later this morning.

With progress towards a COVID-19 vaccine, however, the DAX30 will likely be resilient to today’s numbers.

From the ECB, the ECB monetary policy meeting minutes will draw interest later in the day, however.

With the ECB assuring more support next month, the markets will be looking for some guidance on what to expect.

From the U.S, there are no material stats, with the U.S markets closed for Thanksgiving.

Away from the economic calendar, expect COVID-19 news updates and Brexit to also influence.

The Futures

In the futures markets, at the time of writing, the DAX was down by 0.50 points.

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

European Equities: Futures Point North ahead of a Data Deluge from the U.S

Economic Calendar:

Wednesday, 23rd November

ECB Financial Stability Review

France Jobseekers Total

Thursday, 24th November

GfK German Consumer Climate (Dec)

ECB Publishes Account of Monetary Policy Meeting  

Friday, 25th November

French Consumer Spending (MoM) (Oct)

French CPI (MoM) (Nov) Prelim

French GDP (QoQ) (Q3) Final

French HICP (MoM) (Nov) Prelim

Eurozone Consumer Confidence Final

The Majors

It was a bullish day for the European majors on Tuesday. The DAX30 and the CAC40 rose by 1.26% and by 1.21% respectively, with the EuroStoxx600 gaining 0.91%.

Positive updates on the COVID-19 vaccine front continued to support the majors on the day. News of Trump agreeing to the transition and of previous FED Chair Yellen joining the new administration also delivered a boost.

On the economic data front, a fall in business sentiment failed to weigh on the DAX30 and broader risk sentiment. Progress towards a COVID-19 vaccine muted any disappointing numbers on the day.

The Stats

It was a relatively busy day on the Eurozone economic calendar. Finalized 3rd quarter GDP and November IFO Business Climate Index figures for Germany were in focus.

In the 3rd quarter, the German economy expanded by 8.5%, partially reversing a 9.7% contraction from the 2nd quarter.

Year-on-year, the economy contracted by 3.9%. In the 2nd quarter, the economy had contracted by 11.3%.

Both were revised upwards from 1st estimate numbers.

On the business sentiment front, the IFO Business Climate Index fell from 92.5 to 90.7 Economists had forecast a decline to 90.1. Weighing on sentiment was a fall in business expectations, which slid from 94.7 to 91.5. The current assessment indicator saw a marginal decline from 90.4 to 90.0 for November.

From the U.S

Consumer confidence figures were in focus. In November, the CB Consumer Confidence Index fell from 101.4 to 96.1. Economists had forecast a decline to 98.0. COVID-19 vaccine news is likely to give consumers a boost, however, which muted the impact of the softer than expected number.

The Market Movers

For the DAX: It was a particularly bullish day for the auto sector on Tuesday. Continental rallied by 5.60% to lead the way, with Volkswagen rising by 3.98%. BMW and Daimler weren’t far behind with gains of 3.31% and 3.19% respectively.

It was a bullish day for the banks. Deutsche Bank rose by 2.98%, with Commerzbank rallying by 4.35%.

From the CAC, it was a particularly bullish day for the banks. BNP Paribas and Credit Agricole rallied by 5.41% and by 5.48% respectively. Soc Gen saw a more modest 4.14% gain on the day.

It was also a bullish day for the French auto sector. Peugeot rose by 2.59%, with Renault rallying by 6.87%.

Vaccine news continued to support airline stocks, with Air France-KLM surging by 11.07%, while Airbus SE saw a more modest 3.73% gain.

On the VIX Index

It was a 2nd consecutive day in the red for the VIX on Tuesday. Following a 4.39% decline on Monday, the VIX fell by 4.50% to end the day at $21.64.

COVID-19 vaccine news and news of Joe Biden being given the green light for an orderly transition weighed on the VIX.

On Tuesday, the Dow rose by 1.54%, with the NASDAQ and S&P500 seeing gains of 1.62% and 1.31% respectively.

VIX 251120 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. French jobseeker totals are due out later today.

With the markets expecting labor market conditions to deteriorate, however, the numbers should have a muted impact on the majors.

Of greater interest will be the ECB Financial Stability Review that is due out ahead of the French data.

The ECB is expected to make a move next month. With November PMIs disappointing, the Review could give some idea of what to expect from the ECB.

From the U.S, it is a particularly busy day on the economic calendar ahead of the market close on Thursday.

Key stats include the weekly jobless claims, core durable goods, 2nd estimate GDP, and personal spending figures.

Away from the economic calendar, expect COVID-19 news updates, any stimulus talk from Capitol Hill, and Brexit to also influence.

The Futures

In the futures markets, at the time of writing, the Dow was up by 138 points, with the DAX up by 76.5 points.

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

European Equities: Economic Data from Germany, COVID-19, and Lagarde in Focus

Economic Calendar:

Tuesday, 22nd November

German GDP (Q3) Final

German IFO Business Climate Index (Nov)

ECB President Lagarde Speaks

Wednesday, 23rd November

ECB Financial Stability Review

France Jobseekers Total

Thursday, 24th November

GfK German Consumer Climate (Dec)

ECB Publishes Account of Monetary Policy Meeting  

Friday, 25th November

French Consumer Spending (MoM) (Oct)

French CPI (MoM) (Nov) Prelim

French GDP (QoQ) (Q3) Final

French HICP (MoM) (Nov) Prelim

Eurozone Consumer Confidence Final

The Majors

It was a relatively bearish start to the week for the European majors on Monday. The EuroStoxx600 fell by 0.20%, with the DAX30 and the CAC40 seeing losses of 0.08% and 0.07% respectively.

Concerns over further lockdown measures to contain the COVID-19 pandemic weighed, as new COVID-19 cases continued to spike.

While November’s prelim private sector PMIs had failed to send the majors into the red early in the session, further economic stress is anticipated.

The combination of disappointing PMI numbers and the continued rise in new COVID-19 cases did the damage. Earlier in the day, clinical trial data from AstraZeneca had also failed to impress, with a 90% efficacy rate coming up short of those of Pfizer Inc. and Moderna Inc.

Talk from Pfizer Inc. of a vaccine being available in the U.S by mid-December had provided support early in the session, however.

The Stats

It was a busy day on the Eurozone economic calendar. Prelim November private sector PMI numbers for France, Germany, and the Eurozone were in focus.

France’s manufacturing PMI slipped from 51.0 to 49.1, with the Services PMI falling from 46.5 to 38.0. Both PMIs fell to 6-month lows in November, according to prelim figures.

From Germany, the Manufacturing PMI fell from a 30-month high 58.0 to 57.9. The Services PMI fell from 49.5 to a 6-month low 46.2.

For the Eurozone, the Manufacturing PMI fell from a 26-month high 54.8 to 53.6, with the Services PMI declining from 46.9 to a 6-month low 41.3.

As a result of the deeper contraction in the services sector, the Eurozone’s Composite PMI fell from 50.0 to a 6-month low of 45.1.

According to the Eurozone’s prelim October Survey,

  • Business activity fell sharply as countries reintroduced more aggressive measures to contain the COVID-19 pandemic.
  • Service sector activity was hardest hit, with the rate of decline in sector output the most marked since May.
  • Manufacturers saw the slowest rate of increase in new orders over the past 5-months. For service sector firms, new business collapsed by levels not seen since May.
  • By member state, Germany bucked the wider downturn trend.
  • For France, by contrast, the composite fell by the steepest rate since May.
  • Employment fell across the Eurozone for a 9-consecutive month, though employment in Germany rose for the 1st time since February.

From the U.S

November’s prelim private sector PMIs were also in focus late in the European session.

The Manufacturing PMI rose from 53.4 to 56.7, with the services PMI increasing from 56.9 to 57.7. As a result, the composite PMI rose from 56.3 to 57.9.

According to November’s prelim survey,

  • The services PMI hit a 68-month high, with the manufacturing PMI hitting a 74-month high.
  • Firms reported a marked increase in new orders, with the rate of increase the fastest since Jun-18.
  • Domestic demand drove the surge in new orders, with new export business only seeing marginal increases.
  • Labor market conditions also improved, with the rise in employment the steepest since records began in 2009.
  • Optimism hit its highest level since 2014, supported by an end to election uncertainty and hopes of a COVID-19 vaccine.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Monday. Continental rose by 2.27% to lead the way, with BMW and Daimler seeing gains of 0.47% and 1.32% respectively. Volkswagen fell by 0.69%, however, to buck the trend on the day.

It was a bullish day for the banks. Deutsche Bank rose by 3.82%, with Commerzbank rallying by 5.54%.

From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen rose by 1.32% and by 2.41% respectively. Credit Agricole jumped by 4.07%, however, to lead the way.

It was a mixed day for the French auto sector. Peugeot fell by 0.54%, while Renault ended the day up by 4.28%.

Air France-KLM rallied by 5.37%, while Airbus SE saw a more modest 1.69% gain.

On the VIX Index

It was back into the red for the VIX on Monday. Reversing a 2.55% gain from Friday, the VIX fell by 4.39% to end the day at 22.66.

Talk of Pfizer Inc. delivering a vaccine by mid-December and upbeat private sector PMI numbers from the U.S delivered support.

The upside came in spite of a continued rise in new COVID-19 cases and the latest round of containment measures.

On Monday, the Dow rose by 1.12%, with the NASDAQ and S&P500 seeing gains of 0.22% and 0.56% respectively.

The Day Ahead

It’s a relatively busy day ahead on the Eurozone economic calendar. Finalized 3rd quarter GDP and IFO Business Climate figures for November are due out of Germany.

With the Eurozone economy at the mercy of the COVID-19 2nd wave, the business climate figure will likely have the greatest impact.

On the monetary policy front, ECB President Draghi is also scheduled to speak late in the session. Any forward guidance on monetary policy will influence.

From the U.S, consumer confidence for November will also provide direction late in the day.

Away from the economic calendar, COVID-19 news updates and any chatter from Capitol Hill will need monitoring.

The Futures

In the futures markets, at the time of writing, the Dow was up by 16 points.

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

European Equities: Private Sector PMIs in Focus

Economic Calendar:

Monday, 21st November

French Manufacturing PMI (Nov) Prelim

French Services PMI (Nov) Prelim

German Manufacturing PMI (Nov) Prelim

German Services PMI (Nov) Prelim

Eurozone Manufacturing PMI (Nov) Prelim

Eurozone Markit Composite PMI (Nov) Prelim

Eurozone Services PMI (Nov) Prelim

Tuesday, 22nd November

German GDP (Q3) Final

German IFO Business Climate Index (Nov)

ECB President Lagarde Speaks

Wednesday, 23rd November

ECB Financial Stability Review

France Jobseekers Total

Thursday, 24th November

GfK German Consumer Climate (Dec)

ECB Publishes Account of Monetary Policy Meeting  

Friday, 25th November

French Consumer Spending (MoM) (Oct)

French CPI (MoM) (Nov) Prelim

French GDP (QoQ) (Q3) Final

French HICP (MoM) (Nov) Prelim

Eurozone Consumer Confidence Final

The Majors

It was a bullish end to a bullish week for the European majors on Friday. The DAX30 and CAC40 both rose by 0.39%, with the EuroStoxx600 gaining 0.52%.

The upside at the end of the week came as the markets continued to look towards a COVID-19 vaccine to end the pandemic.

Gains were limited, however, with the latest containment measures across the EU and the U.S to deliver a heavy blow to the respective economies.

The Stats

It was a relatively quiet day on the Eurozone economic calendar. German wholesale inflation and Eurozone consumer confidence figures were in focus on the day.

Wholesale sale inflation figures from Germany were in line with forecasts. The producer price index rose by just 0.1% in October, following a 0.4% increase in September.

From the Eurozone, consumer confidence deteriorated amidst the 2nd wave of the COVID-19 pandemic. The Eurozone’s consumer confidence indicator slipped from -15.5 to -17.6 for November. Economists had forecast a decline to -17.7.

From the U.S

There were no material stats to provide the majors with direction late in the session.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Friday. Daimler rose by 0.43% to buck the trend on the day. Continental and Volkswagen both fell by 0.68%, with BMW ending the day down by 0.47%.

It was also a mixed day for the banks. Deutsche Bank fell by 0.20%, while Commerzbank rose by 0.67%.

From the CAC, it was also a mixed day for the banks. BNP Paribas and Credit Agricole rose by 0.36% and by 0.86% respectively. Soc Gen bucked the trend, however, falling by 0.14%

It was a bearish day for the French auto sector. Peugeot and Renault fell by 0.89% and by 0.95% respectively.

Air France-KLM eked out a 0.02% gain, while Airbus SE declined by 0.77%.

On the VIX Index

It was back into the green for the VIX on Friday. Partially reversing a 3.06% fall from Thursday, the VIX rose by 2.55% to end the day at 23.70.

A late pullback across the U.S equity markets delivered the upside for the VIX on the day.

Disagreements between the U.S Treasury and the FED on the use of emergency funds weighed on risk appetite late in the day.

On Friday, the Dow and S&P500 fell by 0.75% and by 0.68% respectively, with the NASDAQ ended the day down by 0.42%.

The Day Ahead

It’s a particularly busy day ahead on the Eurozone economic calendar. November’s prelim private sector PMI numbers for France, Germany, and the Eurozone are due out later today.

Expect sensitivity to the numbers as the markets look to get a sense of what damage the 2nd wave is having on the economy.

Service sector activity is likely to see a more material impact as a result of the reintroduced containment measures.

From the U.S, November’s prelim private sector PMIs will also influence late in the session.

Away from the economic calendar, COVID-19 news updates and any chatter from Capitol Hill will provide direction.

The Futures

In the futures markets, at the time of writing, the Dow was down by a modest 44 points.

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

The Week Ahead – Private Sector PMIs, COVID-19, Brexit, and Capitol Hill in Focus

On the Macro

It’s a busy week ahead on the economic calendar, with 52 stats in focus in the week ending 27th November. In the week prior, 62 stats had also been in focus.

For the Dollar:

It’s a busy but shortened week ahead on the economic data front.

In the 1st half of the week, prelim November private sector PMIs and consumer confidence figures are in focus.

Expect the Services PMI and CB Consumer Confidence figures to be the key drivers.

The focus will then shift to a particularly busy Wednesday.

Key stats include the weekly jobless claims, core durable goods orders, and personal spending figures.

2nd estimate GDP numbers for the 3rd quarter are also due out. Barring a marked deviation from 1st estimate, however, the numbers should have a muted impact on risk sentiment.

Other stats due out in the week include house price, trade, inflation, new home sales, and finalized consumer sentiment figures.

We don’t expect these to have a material impact on the Dollar, however.

On the monetary policy front, the FOMC minutes due out late in the week will also draw attention. Any contingency plans, in event of lawmakers failing to deliver an additional stimulus, would draw interest.

Away from the economic calendar, COVID-19 and U.S politics will continue to remain the key drivers, however.

The Dollar Spot Index ended the week down by 0.39% to 92.392.

For the EUR:

It’s a busy week ahead on the economic data front.

Prelim November private sector PMI figures for France, Germany, and the Eurozone are due out on Monday.

Expect plenty of influence from the numbers, with COVID-19 containment measures likely to hit service sector activity.

On Tuesday, the focus will shift to finalized GDP and November Ifo business sentiment figures from Germany.

With lockdown measures in place, the GDP numbers are unlikely to have too much influence.

On Thursday, German consumer sentiment figures are due out that will also draw plenty of attention.

At the end of the week, French consumer spending, inflation, and finalized GDP numbers are due out.

Expect inflation and consumer spending figures to have the greatest impact.

Eurozone consumer confidence and French jobseeker totals due out in the week should have a muted impact on the EUR.

On the monetary policy front, the ECB monetary policy meeting minutes are due out on Thursday. The markets will be looking for an indication of what policy easing measures are likely next month.

Away from the economic calendar, COVID-19 news updates will remain a key driver in the week.

The EUR/USD ended the week up by 0.19% to $1.1857.

For the Pound:

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

Prelim November private sector PMIs are due out at the start of the week. With lockdown measures in place, expect plenty of influence from the PMIs.

The Services PMI would likely have the greatest impact on the Pound.

Away from the economic calendar, the markets will be looking for some updates on Brexit.

The GBP/USD ended the week up by 0.65% to $1.3275.

For the Loonie:

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

There are no material stats due out of Canada to influence the Loonie in the week.

A lack of stats will leave the Loonie in the hands of COVID-19 news updates and crude oil prices.

The Loonie ended the week up by 0.32% to C$1.3095 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

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

3rd quarter construction work done and private capital expenditure figures are due out on Wednesday and Thursday.

The CAPEX numbers will likely have a greater influence in the week.

Away from the economic calendar, COVID-19 news and U.S politics will continue to influence.

The Aussie Dollar ended the week up by 0.44% to $0.7302.

For the Kiwi Dollar:

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

3rd quarter retail sales figures are due out on Monday. With the RBNZ ready to drop rates into negative territory, expect sensitivity to the numbers.

The focus will then shift to October trade data, due out on Thursday.

From the RBNZ, the RBNZ Financial Stability Report and a Governor Orr speech on Wednesday will draw plenty of attention.

The Kiwi Dollar ended the week up by 1.23% to $0.6929.

For the Japanese Yen:

It is a quieter week on the economic calendar, with Japanese markets closed on Monday.

November inflation figures are due out on Friday ahead of October retail sales figures on Saturday.

We don’t expect the stats to influence, with COVID-19 remaining the key driver near-term.

The Japanese Yen ended the week up by 0.74% to ¥103.86 against the U.S Dollar.

Out of China

It’s a quiet week ahead on the economic data front.

There are no material stats to provide direction in the week. A lack of stats will leave foreign policy and sentiment towards Hong Kong in focus.

The Chinese Yuan ended the week up by 0.66% to CNY6.5630 against the U.S Dollar.

Geo-Politics

U.S Politics

The focus in the week will be on Capitol Hill, as the markets look for progress towards a COVID-19 stimulus package.

With the COVID-19 2nd wave hitting the U.S, failure to make progress will test support for riskier assets.

From the Oval Office, will this be the week when President Trump concedes? To date, Trump has failed to make any headway in reversing the outcome of the Presidential Election.

Brexit

For the Pound and the UK economy, Brexit will remain a key driver. After talks were suspended last week, will there be some form of an extension to the transition period?

News from the weekend was positive, suggesting progress towards a deal, despite differences remaining.

The Weekly Wrap – COVID-19 and U.S Politics Drove Risk Sentiment

The Stats

It was a busier week on the economic calendar, in the week ending 20th November.

A total of 62 stats were monitored, following 48 stats from the week prior.

Of the 62 stats, 33 came in ahead of forecasts, with 20 economic indicators came up short of forecasts. 9 stats were in line with forecasts in the week.

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

For the Greenback, it was back into the red after the previous week’s partial recovery. The Dollar Spot Index fell by 0.39% to 92.392. In the week prior, the Dollar had risen by 0.53% to 92.721.

While a continued spike in new COVID-19 cases tested support for riskier assets, progress towards a COVD-19 vaccine delivered support in the week. Impressive efficacy rates from Moderna Inc. and Pfizer Inc. eased demand for the Dollar in the week.

Out of the U.S

It was a relatively busy week on the economic data front.

In the 1st half of the week, October retail sales and industrial production figures were in focus.

The stats were skewed to the negative, with retail sales disappointing at the turn of the quarter.

While industrial production figures were positive, consumer spending remains the key driver for the U.S economy. Continued failure to deliver on a COVID-19 stimulus package is likely to deliver weaker numbers ahead on the spending front.

In the 2nd half of the week, the Philly FED Manufacturing and weekly jobless claims figures also disappointed.

Initial jobless claims rose from 711k to 742k in the week ending 13th November. The Philly FED Manufacturing Index fell from 32.3 to 26.3.

Other stats in the week included manufacturing numbers from NY State, housing sector data, and inventories.

The stats had a muted impact on the Dollar and broader market risk sentiment, however.

In the equity markets, the NASDAQ rose by 0.22%, while the Dow and S&P500 fell by 0.73% and by 0.77% respectively.

Out of the UK

It was a relatively busy week on the economic data front.

Early in the week, October inflation figures were in focus. A pickup in inflationary pressures was Pound positive. The annual rate of inflation picked up from 0.5% to 0.7%.

That was the only positive, however, with consumer prices stalling in October and wholesale inflationary pressures easing.

Mid-week, the CBI Industrial Trend Orders index also came in negative, with a fall from -34 to -40 in November.

Wrapping things up were retail sales figures at the end of the week. In October, core retail sales rose by 1.3%, following a 1.5% increase in September. Retail sales increased by 1.2%, following a 1.4% rise in September. Both sets of figures came in ahead of forecasts, whilst softer than September figures.

Year-on-year, core retail sales were up by 7.8%, with retail sales up by 5.8%.

Away from the economic calendar, negotiators suspended Brexit negotiations. Members of the EU negotiating team self-isolated due to one member testing positive for COVID-19. Talks of a possible extension provided the Pound with support as did hopes of an agreement.

In the week, the Pound rose by 0.65% to $1.3275. In the week prior, the Pound had risen by 0.26% to $1.3189.

The FTSE100 ended the week up by 0.56%, following on from a 6.88% gain in the previous week.

Out of the Eurozone

It was a relatively quiet week on the economic data front.

Finalized October inflation figures for Italy and the Eurozone provided little direction in the week.

The finalized numbers were in line with prelim figures, with the Eurozone’s core annual rate of inflation holding steady at 0.2%.

Following ECB President Lagarde’s assurances of more monetary policy support, there was little EUR reaction.

At the end of the week, wholesale inflation figures from Germany also had a muted impact.

With the COVID-19 2nd wave hitting the Eurozone, the Eurozone’s consumer confidence figure drew some attention.

The Flash Consumer Confidence Indicator fell from -15.5 to -17.6, which was better than a forecasted -17.7. Downside risks to the economic recovery were affirmed by the number. Lockdown measures are expected to sink the Eurozone economy, as a result, in the 4th quarter.

For the week, the EUR rose by 0.19% to $1.1857. In the week prior, the EUR had fallen by 0.34% to $1.1834.

For the European major indexes, it was another bullish week. The CAC40 rallied by 2.15%, with the DAX30 and EuroStoxx600 gaining 0.46% and 1.15% respectively.

For the Loonie

It was a busy week on the economic data front.

Manufacturing and wholesale sales figures for September were skewed to the positive providing support.

Mid-week, October inflation figures were also Loonie positive, with the core annual rate of inflation holding steady at 1%. Rising core consumer prices and consumer prices in October delivered support.

At the end of the week, retail sales figures for September were also Loonie positive.

Core retail sales rose by 1.0%, month-on-month, following on from a 0.5% increase in August. Retail sales were also on the up, rising by 1.1% off the back of a 0.4% increase in August.

While the stats were skewed to the positive, progress towards a COVID-19 vaccine was key in the week.

In the week ending 20th November, the Loonie rose by 0.32% to C$1.3095. In the week prior, the Loonie had fallen by 0.67% to C$1.3137.

Elsewhere

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

In the week ending 20th November, the Aussie Dollar rose by 0.44% to $0.7302, with the Kiwi Dollar rallying by 1.23% to end the week at $0.6929.

For the Aussie Dollar

It was a relatively quiet week on the economic calendar.

Key stats included 3rd quarter wage growth and October employment and retail sales figures.

While wage growth figures disappointed, employment and retail sales figures impressed.

A 178.8k jump in employment and a 1.6% increase in retail sales were positives for the Aussie Dollar.

On the monetary policy front, however, the RBA meeting minutes revealed the willingness to deliver more support. While unwilling to drop rates into negative territory, the commitment to delivering more support pegged the Aussie Dollar back.

COVID-19 vaccine news provided support, however, to offset the negative sentiment towards the rise in new cases.

For the Kiwi Dollar

It was a particularly quiet week on the economic calendar.

3rd quarter wholesale inflation figures were in focus. A pickup in input prices was considered Kiwi positive, though falling output prices remained a concern.

While the stats were positive, positive economic data from China and progress towards a COVID-19 vaccine were positives.

For the Japanese Yen

It was a busy week on the economic calendar.

3rd quarter GDP numbers were in focus at the start of the week. While rebounding from the 2nd quarter woes, growth was not enough to reverse the contraction from the 2nd quarter.

Quarter-on-quarter, the economy grew by 5%, partially reversing an 8.2% contraction from the 2nd quarter.

Trade data also failed to impress mid-week, with imports tumbling by 13.3% to widen the trade surplus. Exports also declined, though at a slower pace than in September.

Wrapping things up were inflation figures at the end of the week. A buildup of deflationary pressures was yet another negative for the Japanese economy.

A market grappling with a continued spike in new COVID-19 cases and hopes of a vaccine supported the Yen, however.

The Japanese Yen rose by 0.74% to ¥103.86 against the U.S Dollar. In the week prior, the Yen had fallen by 1.24% to ¥104.63.

Out of China

It was a busy week on the economic data front.

October fixed asset investment, industrial production, retail sales, and unemployment figures were in focus.

The stats were skewed to the positive, reaffirming market sentiment towards the Chinese economic recovery.

Fixed asset investments rose by 1.8%, year-on-year, following a 0.8% rise in September. Industrial production increased by a further 6.9%, following a 6.9% rise in September.

Retail sales also impressed, jumping by 4.3%. In September, retail sales had risen by 3.3%.

Labor market conditions improved, with the unemployment rate falling from 5.4% to 5.3%.

The figures continued to reflect Beijing’s goal to reignite the economy from within.

In the week ending 13th November, the Chinese Yuan rose by 0.66% to CNY6.5630. In the week prior, the Yuan had risen by 0.09% to CNY6.6065.

The CSI300 rose by 1.78%, with the Hang Seng ended the week up by 1.13%.

European Equities: A Week in Review – 20/11/20

The Majors

It was another bullish week for the European majors in the week ending 20th November.

The CAC40 rallied by 2.15% to lead the way, with the DAX30 and EuroStoxx 600 gaining 0.46% and 1.15% respectively.

COVID-19 vaccine updates drove demand for riskier assets in the week. Both Moderna Inc. and Pfizer Inc. delivered phase 3 clinical trial results that impressed the markets. At the end of the week, Pfizer Inc. and BioNTech submitted a EUA to the FDA, which was also positive for the majors.

The numbers came off the back of Pfizer Inc.’s first set of results from the week prior.

From the U.S, there was also news that stimulus talks are set to resume that provided further support at the end of the week.

For the week, the upside was tempered, however, with a continued spike in new COVID-19 cases weighing.

Concerns over the possibility of further lockdown measures to curb the spread pinned the majors back late in the week.

The Stats

Finalized October inflation figures for Italy and the Eurozone provided little direction in the week.

The markets are expecting an ECB move next month, which muted the impact of the numbers.

At the end of the week, wholesale inflation figures from Germany also had a muted impact.

With the COVID-19 2nd wave hitting the Eurozone, the Eurozone’s consumer confidence figure did draw some attention, however.

The Flash Consumer Confidence Indicator fell from -15.5 to -17.6, which marginally better than a forecasted -17.7.

Impact on the majors was limited, with the markets expecting consumer confidence to be on the slide.

From the U.S

In the 1st half of the week, October retail sales and industrial production figures were in focus.

The stats were skewed to the negative, with retail sales disappointing at the turn of the quarter.

While industrial production figures were positive, consumer spending remains the key driver for the U.S economy. Continued failure to deliver on a COVID-19 stimulus package is likely to deliver weaker numbers ahead on the spending front.

In the 2nd half of the week, the Philly FED Manufacturing and weekly jobless claims figures also disappointed.

Initial jobless claims rose from 711k to 742k in the week ending 13th November. The Philly FED Manufacturing Index fell from 32.3 to 26.3.

Other stats in the week had a muted impact on the Dollar and broader market risk sentiment, however.

The Market Movers

From the DAX, it was another bullish week for the auto sector. Daimler rallied by 5.67%, with BMW and Continental gaining 4.43% and 3.28% respectively. Volkswagen saw a more modest 0.77% rise.

It was a mixed week for the banking sector, however. Commerzbank rose by 0.75%, while Deutsche Bank ending the week down by 0.44%.

From the CAC, it was another bullish week for the banks. BNP Paribas rose by 2.58%, with Credit Agricole and Soc Gen rallying by 3.71% and by 3.39% respectively.

The French auto sector found yet more support, with Peugeot and Renault ending the week up by 5.96% and by 6.31% respectively.

Air France-KLM followed last week’s 26.67% surge with an 8.5% rally, while Airbus rose by a more modest 3.60%.

On the VIX Index

It was back into the green for the VIX, ending a run of 2consecutive weekly declines. In the week ending 20th November, the VIX rose by 2.60%. Partially reversing a 7.08% fall from the previous week, the VIX ended the week at 23.70.

A pullback in the S&P500 and the Dow came in the week as the markets continued to respond to the surge in new COVID-19 cases.

The downside was relatively muted, however, with support coming from progress towards a COVID-19 vaccine. There was also news of lawmakers planning on resuming talks to deliver a COVID-19 stimulus package, which also cushioned the fall.

Adding to the downside late in the week was a dispute between the U.S Treasury and the FED over emergency funding.

For the week, the NASDAQ rose by 0.22%, while the Dow and S&P500 saw losses of 0.73% and 0.77% respectively.

VIX 211120 Weekly Chart

The Week Ahead

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

November prelim private sector PMIs for France, Germany, and the Eurozone gets things going at the start of the week.

Expect plenty of sensitivity to the service sector figures in particular.

On Tuesday, finalized 3rd quarter GDP and November Ifo business climate figures are out from Germany. Expect the headline IFO Business Climate Index figure to be the key driver.

On Thursday, German consumer sentiment figures for December are due out ahead of a relatively busy end to the week.

October consumer spending and finalized 3rd quarter GDP numbers from France wrap things up.

From elsewhere, private sector PMIs, consumer confidence, durable goods, and weekly jobless claims figures from the U.S will also influence.

On the monetary policy front, the ECB and FOMC meeting minutes will also provide direction late in the week.

Away from the economic calendar, COVID-19 news updates and any updates from Capitol Hill on a stimulus package will also influence.

European Shares, US Futures Mixed; Mnuchin Decision Reduces Fed’s Lending Power

The major European stock indexes and U.S. stock market futures are trading mixed on Friday with stocks in Europe edging cautiously higher and U.S. futures trying to claw back earlier losses. Besides the coronavirus drag and vaccine optimism, investors are being asked to deal with conflicting prospects for U.S. fiscal and monetary stimulus.

At 10:29 GMT, the U.K.’s FTSE 100 is trading 6379.24, up 44.89 or +0.71%, Germany’s DAX is at 13147.54, up 61.38 or +0.47% and France’s CAC 40 is at 5513.42, up 38.76 or +0.71%.

In the United States, December E-mini NASDAQ-100 Index futures are trading nearly flat, and the December E-mini S&P 500 Index and December E-mini Dow futures are trading slightly lower. All three indices are rebounding from early session weakness.

European Shares Supported by Gains in Commodity, Retail Stocks

European stocks edged higher on Friday as gains in commodity and retail shares offset worries about U.S. politics and an impasse over fresh stimulus measures to support a pandemic-stricken global economy.

Stocks were on track for marginal weekly gains after signs of progress on COVID-19 vaccine pushed the index to February highs earlier this week.

Energy stocks were among the top gainers on oil prices steadied, putting them on course for a third straight weekly rise on prospects of an effective COVID-19 vaccine. Miners also jumped over 1% on stronger metal prices.

Treasury Yields Fall After Mnuchin Pulls Plug on Fed Lending Power

U.S. Treasury yields declined on Friday after U.S. Treasury Secretary Steven Mnuchin decided to let several of the Federal Reserve’s emergency funding programs expire on December 31.

The yield on the benchmark 10-year Treasury note slipped to 0.836% at 09:38 GMT ET, while the yield on the 30-year Treasury bond fell to 1.547%.

Treasury yields dropped after Mnuchin issued a letter on Thursday that said he would not extend the Fed’s programs that used Congress’ CARES Act funds. This reduces the Fed’s ability to support the financial system.

The Fed pushed back on Mnuchin’s decision, saying:  “The Federal Reserve would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”

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

European Equities: COVID-19 and U.S Stimulus Talks in Focus

Economic Calendar:

Friday, 20th November

German PPI (MoM) (Oct)

Eurozone Consumer Confidence Flash

The Majors

It was a bearish day for the European majors on Thursday. The DAX30 fell by 0.88%, with the CAC40 and the EuroStoxx600 seeing losses of 0.67% and 0.75% respectively.

A continued spike in new COVID-19 cases and a reintroduction of containment measures in the U.S weighed on the majors.

The latest spike in new cases across the U.S has raised concerns that the U.S government may have to bring lockdown measures back into effect.

For the European majors, the downside was limited, however, with support coming from progress towards a COVID-19 vaccine.

The Stats

It was a particularly quiet day on the Eurozone economic calendar. There were no material stats to provide the majors with direction on the day.

From the U.S

It was a busier day on the economic calendar. Key stats included November’s Philly FED Manufacturing and the weekly jobless claims figures.

Disappointing jobless claims figures and a fall in the Philly FED Manufacturing Index left the European majors on the back foot.

In the week ending 13th November, initial jobless claims stood at 742k, rising from the previous week’s 711k.

The Philly FED Manufacturing Index fell from 32.3 to 26.3 in November. While down, it was better than a forecasted 22.0.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Thursday. BMW rose by 1.27% to buck the trend on the day. Continental and Volkswagen fell by 0.45% and by 0.61% respectively, however, with Daimler slipping by 0.02%.

It was a bearish day for the banks. Deutsche Bank fell by 0.43%, with Commerzbank sliding by 4.68%.

From the CAC, it was also a bearish day for the banks. BNP Paribas and Credit Agricole fell 0.79% and by 0.58% respectively. Soc Gen led the way down, however, with a 1.41% loss.

It was a mixed day for the French auto sector. Peugeot rose by 2.35%, while Renault fell by 0.72%.

Air France-KLM slid by 2.60%, with Airbus SE declining by 0.74%.

On the VIX Index

It was back into the red for the VIX on Thursday. Partially reversing a 4.98% gain on Wednesday, the VIX fell by 3.06% to end the day at 23.11.

A late rebound across the U.S equity markets left the VIX in the red on the day.

Market fears of a reintroduction of lockdown measures to contain the COVID-19 pandemic had weighed on the U.S majors.

A late rebound came, however, on news that stimulus talks are to resume on Capitol Hill.

On Thursday, the Dow and S&P500 rose by 0.15% and by 0.39% respectively, with the NASDAQ ending the day up by 0.87%.

VIX 201120 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. German wholesale inflation figures and Eurozone consumer confidence figures are due out later today.

We would expect the consumer confidence figures to have the greatest impact on the day.

From the U.S, there are no material stats to provide direction late in the session.

Away from the economic calendar, COVID-19 news updates and any chatter from Capitol Hill will provide direction.

With new COVID-19 cases spiking across the U.S and states reintroducing containment measures, a stimulus package is now a must. A lack of progress coupled with further spikes in new cases would weigh on riskier assets.

The Futures

In the futures markets, at the time of writing, the Dow was down by 236 points.

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

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

Economic Calendar:

Thursday, 19th November

ECB President Lagarde Speaks

Friday, 20th November

German PPI (MoM) (Oct)

Eurozone Consumer Confidence Flash

The Majors

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

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

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

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

The Stats

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

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

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

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

From the U.S

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

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

The Market Movers

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

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

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

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

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

On the VIX Index

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

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

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

VIX 191120 Daily Chart

The Day Ahead

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

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

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

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

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

The Futures

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

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

European Equities: Brexit and Capitol Hill in Focus, with an Eye on COVID-19 Numbers

Economic Calendar:

Wednesday, 18th November

Eurozone Core CPI (YoY) (Oct) Final

Eurozone CPI (YoY) (Oct) Final

Eurozone CPI (MoM) (Oct) Final

Thursday, 19th November

ECB President Lagarde Speaks

Friday, 20th November

German PPI (MoM) (Oct)

Eurozone Consumer Confidence Flash

The Majors

It was a mixed day for the European majors on Tuesday. The CAC40 rose by 0.21%, while the CAC30 and EuroStoxx600 fell by 0.04% and by 0.25% respectively.

Following the market reaction to Moderna Inc.’s vaccine results on Monday, investors hit pause.

With the vaccine unlikely to be widely available until after the winter, the focus returned to near-term economic woes.

Containment measures to stem the spread of the 2nd wave weighed on risk appetite. Any hopes of a continued economic recovery through the remainder of the year have been dashed by the latest lockdown measures.

The Stats

It was a particularly quiet day on the Eurozone economic calendar. There were no material stats from the Eurozone to provide the majors with direction.

From the U.S

It was a busier day on the economic calendar. Key stats included October retail sales and industrial production figures.

In October, core retail sales rose by just 0.2%, month-on-month, following a 1.2% jump in September. Retail sales rose by 0.3%, following a 1.6% rise in September. Economists had forecasted increases of 0.6% and 0.5% respectively.

Month-on-month, industrial production rose by 1.1%, reversing a 0.4% decline from September. Economists had forecast a 1% rise.

Other stats on the day included import and export price and business inventory numbers that the markets brushed aside.

The Market Movers

For the DAX: It was another bullish day for the auto sector on Tuesday. Continental and Daimler rose by 1.41% and by 1.66% respectively to lead the way. BMW and Volkswagen both saw more modest gains of 0.57%.

It was also a bullish day for the banks. Deutsche Bank rose by 0.19%, with Commerzbank gaining 1.12%.

From the CAC, it was another relatively bullish day for the banks, with BNP Paribas and Credit Agricole rising by 0.80% and by 0.32% respectively. Soc Gen ended the day up by 1.31%, however, to lead the way once more.

It was also another positive day for the French auto sector. Peugeot eked out a 0.03% gain, with Renault rising by 0.52%.

Air France-KLM slipped by 0.14% following Monday’s 11.71% COVID-19 vaccine fuelled surge, while Airbus SE rose by 0.10%.

On the VIX Index

It was back into the green for the VIX on Tuesday, marking just a 4th daily gain from fourteen. Partially reversing a 2.81% fall on Monday, the VIX rose by 1.16% to end the day at 22.71.

On Tuesday, the Dow fell by 0.56%, with the NASDAQ and the S&P500 seeing losses of 0.21% and 0.48% respectively.

VIX 181120 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. Finalized inflation figures for the Eurozone are due out later today.

We don’t expect the stats to have a material impact on the European majors, however.

From the U.S, building permits and housing starts for October are due out late in the session. Again, the stats are unlikely to have a material impact on the majors.

While updates from the final day of Brexit talks may influence, COVID-19 news updates remain the key driver. Across the pond, any hopes of a pre-holiday stimulus package also look slim, which will continue to test support for riskier assets. Labor market conditions remain dire and October retail sales figures disappointed on Tuesday. Without a 2nd package, expectations are that unemployment will pick up again, which will weigh more heavily on spending. Similar threats loom large across the EU.

The Futures

In the futures markets, at the time of writing, the Dow was down by 56 points.

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

European Shares, US Futures Drift Lower in Early Trade; Investors Buying Value Companies

The major U.S. stock index futures contracts are edging lower early Tuesday after two of the three closed at record highs the previous session. The early price action shows the benchmark S&P futures down 11.25 or -0.31%. The blue chip Dow futures are down 67.00 or -0.22% and the tech-based NASDAQ futures is bucking the early trend with a gain of 35.00 or +0.37%.

In the cash market on Monday, the S&P 500 and Dow posted all-time closing highs. The Dow also hit an intraday record high. The rallies were fueled by the release of trial data from Moderna Inc showing its coronavirus vaccine was more than 94% effective, further raising expectations of a swift economic recovery.

Investors Buying Value, Building on Last Week’s Strong Gains

“Value and smaller companies typically have more leverage to economic recoveries so a vaccine that would remove the weight of COVID-19 off the economy is a distinct positive,” wrote Bill Stone, chief investment officer at Stone Investment Partners.

“Time will tell if this reversal in trends proves durable or starts “makin’ the tears rain down like a monsoon” for value proponents like the many recent false starts.”

Traders Betting on Second Quarter Growth

“Equity markets focused on the improving medium-term growth implications, which appear to be brightening from H2 2021 onwards. Yet the current virus surge is stifling near-term growth prospects,” cautioned Felicity Emmett, a senior economist at ANZ, in a Tuesday note.

“The market is assuming that we can see the end of the tunnel, that in 2022 a large part of the world’s population will start to receive access to vaccines,” said Herald van der Linde, HSBC’s head of equity strategy for Asia Pacific.

European Shares Slip After Vaccine-Driven Rally

European stocks eased from eight-month highs on Tuesday as tighter coronavirus restrictions across the continent halted a market rally that was powered by encouraging COVID-19 vaccine updates, Reuters reported.

The near-term economic outlook remains hazy, with Sweden moving to restrict the size of public gatherings as COVID-19 cases spike and a British medical adviser suggesting strengthening the three-tier system of restrictions when the full lockdown in England ends, Reuters said.

Meanwhile, European banks retreated after a more than 3% surg. BBVA fell 3.4% after it and smaller rival Sabadell said they were in talks to create Spain’s second-biggest domestic lender by assets.

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