European Equities: A Quiet Economic Calendar to Test Support Further

Economic Calendar

Thursday, 23rd September

Spanish GDP (QoQ) (Q2)

French Manufacturing PMI (Sep) Prelim

French Services PMI (Sep) Prelim

German Manufacturing PMI (Sep) Prelim

German Services PMI (Sep) Prelim

Eurozone Manufacturing PMI (Sep) Prelim

Eurozone Markit Composite PMI (Sep) Prelim

Eurozone Services PMI (Sep) Prelim

Friday, 24th September

German Ifo Business Climate Index (Sep)

The Majors

It was a particularly bearish start to the week for the European majors on Monday.

The DAX30 slid by 2.31% to lead the way down, with the CAC40 and the EuroStoxx600 seeing losses of 1.74% and 1.67% respectively.

Economic data on the day was limited to wholesale inflation figures from Germany, which had a muted impact on the majors.

The lack of stats left the markets with little to avert attention away from Wednesday’s FOMC policy decision and projections.

Following Friday’s pullback, dip buyers remained on the sidelines, with FED policy uncertainty testing support for the majors.

Adding to the market angst on the day was the Evergrande crisis, which sparked contagion fears across the global financial markets.

The Stats

It’s a was a quiet day on the Eurozone economic calendar. In August, Germany’s annual wholesale rate of inflation picked up from 10.4% to 12.0%. Economists had forecast an uptick to 11.4%. Month-on-month, Germany’s producer price index rose by 1.5%, following a 1.9% increase in July. Economists had forecast a more modest 0.8% increase.

From the U.S

It was also a particularly quiet day on the economic calendar, with no major stats for the markets to consider.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Monday. Continental tumbled by 5.59% to lead the way down, with Volkswagen sliding by 3.89%. BMW and Daimler weren’t far off, however, with losses of 2.73% and 2.68% respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank slumped by 7.67% and by 7.92% respectively.

From the CAC, it was a bearish day for the banks. Soc Gen and BNP Paribas slid by 5.70% and by 4.46% respectively, with Credit Agricole falling by 3.86%.

It was also a bearish day for the French auto sector. Stellantis NV slid by 4.47%, with Renault falling by 2.19%.

Air France-KLM bucked the trend, rallying by 5.31%, while Airbus SE slipped by 0.97%.

On the VIX Index

It was a 3rd consecutive day in the green for the VIX on Monday.

Following an 11.34% jump on Friday, the VIX surged by 23.55% to end the day at 25.71.

On Monday, the NASDAQ slid by 2.19%, with the Dow and S&P500 ending the day down by 1.78% and by 1.70% respectively.

VIX 210921 Daily Chart

The Day Ahead

It’s another particularly quiet day ahead on the Eurozone’s economic calendar.

There are no major stats to provide the European majors with direction at the start of the week.

From the U.S there are also no major stats to consider later in the session, leaving the markets in limbo ahead of Wednesday’s FOMC.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 4 points.

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

German Shares Slump 2%, European Index Hits Two-Month Lows

The pan-European STOXX 600 index was down 1.5% by 07:45 GMT, with mining stocks plunging 3.2% on a slide in commodities prices.

Asian equities also skidded following a torrid session for China Evergrande, the world’s most indebted property developer.

The benchmark European STOXX 600 has now fallen for three straight weeks on worries about slowing global growth, soaring inflation, persistently high COVID-19 cases and the spillover from tighter regulation of Chinese firms.

The U.S. Federal Reserve’s policy meeting is in focus on Tuesday and Wednesday, where the central bank is expected to lay the groundwork for a tapering. Overall, 16 central banks are scheduled to hold meetings this week, including in the UK, Norway, Switzerland and Japan.

“To be sure, the (Fed) is set to default to keeping the QE (quantitative easing) spigots open at this week’s (meeting), given the sizable August jobs disappointment alongside a spotting of soft economic indicators,” said Vishnu Varathan, head of economics and strategy at Mizuho.

“But this merely defers taper. By how much is the question.”

German shares tumbled 1.8% to their lowest since late-July as data showed a bigger-than-expected jump in producer prices last month.

In its biggest ever overhaul, the blue-chip German index began trading on Monday with an increase in the number of constituents to 40 from 30.

Europe’s fear gauge jumped to a four-month high.

China-exposed luxury stocks such as LVMH, Kering, Hermes and Richemont fell between 2.5% and 3.7%, extending sharp losses from last week.

Daimler AG shed 2.3% as a report cited the chief of its truck division, the world’s largest, as saying the unit had seen the supply of crucial chips tighten further in recent weeks.

Lufthansa, on the other hand, reversed early declines to jump 3.1% after saying it expects to raise 2.14 billion euros ($2.51 billion) to pay back part of a state bailout that Germany’s top airline received during the coronavirus crisis.

All major European subindexes were lower in morning trading, with healthcare, utilities, food and beverage and real estate posting the smallest declines. The group is perceived to be a safer bet at a time of heightened economic volatility.

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

(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Arun Koyyur)

European Equities: A Quiet Economic Calendar Leaves the FED Monetary Policy in Focus

Economic Calendar

Monday, 20th September

German PPI m/m (Aug)

Thursday, 23rd September

Spanish GDP (QoQ) (Q2)

French Manufacturing PMI (Sep) Prelim

French Services PMI (Sep) Prelim

German Manufacturing PMI (Sep) Prelim

German Services PMI (Sep) Prelim

Eurozone Manufacturing PMI (Sep) Prelim

Eurozone Markit Composite PMI (Sep) Prelim

Eurozone Services PMI (Sep) Prelim

Friday, 24th September

German Ifo Business Climate Index (Sep)

The Majors

It was a bearish end to the week for the European majors on Friday.

The DAX30 slid by 1.03% to lead the way down, with the CAC40 and the EuroStoxx600 seeing losses of 0.79% and 0.88% respectively.

Economic data from the Eurozone was on the lighter side, leaving the markets to look ahead to this week’s FOMC meet.

Uncertainty ahead of the FOMC economic projections and monetary policy outlook weighed on the majors.

Later in the session, talk of an increase in U.S corporate tax weighed on the U.S majors, adding further pressure on the European markets.

The Stats

It’s a was a quiet day on the Eurozone economic calendar. Finalized August inflation figures for the Eurozone were in focus early in the European session.

In August, the Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0%, which was in line with prelim figures.

The core annual rate of inflation held steady at 1.6%, which was also in line with prelim figures.

From the U.S

It was also a relatively quiet day on the economic calendar, with consumer sentiment figures in focus.

In September, the Michigan Consumer Sentiment Index rose from 70.3 to 71.0 versus a forecasted 72.0. The Consumer Expectations climbed from 65.1 to 67.1, according to prelim figures.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. BMW and Volkswagen slid by a 2.48% and by 2.75% respectively, with Daimler falling by 1.42%. Continental bucked the trend following Thursday’s sell-off, however, rising by 1.07%.

It was also a mixed day for the banks. Deutsche Bank fell by 0.23%, while Commerzbank ended the day up by 1.17%.

From the CAC, it was a bearish day for the banks. Soc Gen and BNP Paribas fell by 1.12% and by 1.14% respectively. Credit Agricole led the way down, however, with a 1.77% loss.

It was also a bearish day for the French auto sector. Stellantis NV slid by 3.45%, with Renault falling by 1.20%.

Air France-KLM ended the day up by a further 1.79%, supported by UK travel easing plans, while Airbus SE fell by 1.60%.

On the VIX Index

It was a 2nd consecutive day in the green for the VIX on Friday.

Following a 2.81% gain on Thursday, the VIX jumped by 11.34% to end the day at 20.81.

On Friday, the Dow fell by 0.48%, with the NASDAQ and S&P500 both ending the day down by 0.91% respectively.

VIX 200921 Daily Chart

The Day Ahead

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

There are no major stats to provide the European majors with direction at the start of the week. German wholesale inflation figures are due out but should have a muted impact on the majors.

With no stats from the U.S to consider later in the session, caution ahead of Wednesday’s FOMC will likely peg the majors back.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 101 points.

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

The Week Ahead – Central Banks back in Focus with the BoE and the FED in Action

On the Macro

It’s a quiet week ahead on the economic calendar, with 37 stats in focus in the week ending 17th September. In the week prior, 62 stats had also been in focus.

For the Dollar:

Prelim private sector PMIs for September will be in focus on Thursday.

Expect the services PMI to be the key stat of the week.

Other stats include housing sector data that will likely have a muted impact on the Dollar and the broader market.

The main event of the week, however, is the FOMC monetary policy decision on Wednesday.

With the markets expecting the FED to stand pat, the economic and interest rate projections and press conference will be pivotal. FED Chair Powell prepped the markets for the tapering to begin this year. The markets are not expecting any hint of a shift in policy on interest rates, however…

In the week ending 17th September, the Dollar Spot Index rose by 0.66% to 93.195.

For the EUR:

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

Prelim September private sector PMIs for France, Germany, and the Eurozone will draw plenty of interest on Thursday.

While Germany’s manufacturing PMI is key, expect influence from the entire data set. Market concerns over the economic recovery have tested support for riskier assets. Softer PMI numbers would test EUR support on the day.

For the week, the EUR fell by 0.75% to $1.1725.

For the Pound:

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

On the economic data front, CBI Industrial Trend Orders and prelim private sector PMIs are due out.

Expect the services PMI for September to be the key stat on Thursday.

While the stats will influence, the BoE’s monetary policy decision on Thursday will be the main event.

Persistent inflationary pressure has raised the prospects of a sooner rather than later move by the BoE. Weak retail sales figures have made things less clear, however.

Expect any dissent to drive the Pound towards $1.40 levels.

The Pound ended the week down by 0.71% to $1.3741.

For the Loonie:

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

Early in the week, house price figures for August are due out. The numbers are not expected to have a material impact on the Loonie, however.

Retail sales figures for July, due out on Thursday, will influence, however. Another sharp increase in spending would deliver the Loonie with much-needed support.

The Loonie ended the week down 0.57% to C$1.2764 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

There are no major stats to provide the Aussie Dollar with direction.

While there are no major stats, the RBA monetary policy meeting minutes on Tuesday will influence. The markets will be looking for forward guidance following the latest lockdown measures.

The Aussie Dollar ended the week down by 1.05% to $0.7279.

For the Kiwi Dollar:

It’s another quiet week ahead.

Early in the week, consumer sentiment figures for the 3rd quarter will be in focus.

Trade data, due out on Friday, will be the key numbers for the week, however.

Away from the economic calendar, however, COVID-19 news updates will also be key.

The Kiwi Dollar ended the week down by 1.03% to $0.7040.

For the Japanese Yen:

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

Inflation and prelim private sector PMIs are due out on Friday. We don’t expect the numbers to influence the Yen, however.

On the monetary policy front, the BoJ is in action on Wednesday. We aren’t expecting any surprises, however, as the Delta variant continues to deliver economic uncertainty.

The Japanese Yen rose by 0.01% to ¥109.93 against the U.S Dollar.

Out of China

There are also no major stats due out of China for the markets to consider, with the Chinese markets closed early in the week.

On the monetary policy front, the PBoC is in action. We don’t expect any changes to the Loan Prime Rates, however.

The Chinese Yuan ended the week down by 0.34% to CNY6.4661 against the U.S Dollar.

Geo-Politics

Iran, China, and Russia remain the main areas of interest for the markets. News updates from the Middle East, in particular, will need continued monitoring following recent events in Afghanistan.

European Equities: A Week in Review – 17/09/21

The Majors

It was another bearish week for the majors in the week ending 17th September. The CAC40 led the way down, falling by 1.40%, with the DAX30 and the EuroStoxx600 seeing losses of 0.77% and 0.96% respectively.

Economic data for the Eurozone failed to support the majors, in spite of the stats being skewed to the positive.

Mid-week, disappointing economic data from China fueled market concerns over the economic outlook.

Industrial production in China was up by 5.3%, year-on-year, in August versus a forecasted 5.8% increase. In July, production had been up by 6.4%.

Fixed asset investment was up 8.9% versus a forecasted 9.0%. In July, fixed asset investments had been up 10.3%.

While the numbers from China raised yet more red flags, economic data from the U.S impressed, raising policy uncertainty.

Market jitters ahead of next week’s FOMC policy decision and projections delivered the losses for the DAX30 at the end of the week.

The Stats

Economic data wage growth, industrial production, trade, and finalized inflation figures for the Eurozone.

Finalized inflation figures for Spain, France, and Italy were also out but had a muted impact on the majors.

In the 2nd quarter, wage fell by 0.4%, year-on-year, partially reversing a 2.1% increase recorded in the previous quarter.

Industrial production and trade data were positive, however.

Production increased by 1.5%, reversing a 0.1% fall from June, with the Eurozone’s trade surplus widening from €17.7bn to €20.7bn.

At the end of the week, finalized inflation figures for the Eurozone were in line with prelim figures. The Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August.

From the U.S

In August, the annual rate of core inflation softened from 4.3% to 4.0% versus a forecasted 4.2%. While softer than expected, 4% continued to sit well above the FED’s 2% target, leaving tapering on the table.

Mid-week, industrial production and NY Empire State manufacturing figures were market positive.

On Thursday, retail sales, Philly FED Manufacturing PMI, and jobless claims figures were of greater interest, however.

In August, retail sales increased by 0.7% versus a forecasted 0.2% decline. Core retail sales jumped by 1.8% versus a 0.1% decline. In July retail sales had fallen by 1.1% and core retail sales by 0.4%.

Manufacturing numbers were also upbeat, with the Philly FED Manufacturing PMI increasing from 19.4 to 30.7 in September.

Jobless claims figures failed to impress, however, with sub-300k remaining elusive. In the week ending 10th September, initial jobless claims rose from 312k to 332k. Economists had forecast an increase to 330k.

At the end of the week, consumer sentiment also improved, albeit moderately. In September, the Michigan Consumer Sentiment Index rose from 70.3 to 71.0, falling short of a forecasted 72.0.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Continental slid by 10.98%, with Volkswagen ending the week down by 3.40%. BMW and Daimler ended the week up by 1.44% and by 2.88% respectively, however.

It was also a mixed week for the banking sector. Deutsche Bank rallied by 2.64%, while Commerzbank fell by 0.18%.

From the CAC, it was a mixed week for the banks. BNP Paribas rose by 1.36% to buck the trend. Credit Agricole and Soc Gen fell by 2.59% and by 1.48% respectively.

It was also a mixed week for the French auto sector. Stellantis NV rose by 0.63%, while Renault slid by 1.71%.

Air France-KLM found much needed support, rising by 2.29%, while Airbus ended the week with a 1.15% loss.

On the VIX Index

It was back into the red for the VIX in the week ending 17th September, ending a run of 2 consecutive weekly gains.

Following a 27.67% jump from the previous week, the VIX slipped by 0.67% to end the week at 20.81.

2-days in the red from 5 sessions, which included 6.58% fall on Wednesday delivered the downside. An 11.34% rise on Friday limited the downside from the week, however.

For the week, the NASDAQ fell by 0.47%, with the Dow and the S&P500 ending the week down by 0.07% and by 0.57% respectively.

VIX 180921 Weekly Chart

The Week Ahead

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

Key stats include prelim September private sector PMIs for France, Germany, and the Eurozone.

At the end of the week, German IFO business climate figures will also influence.

From the U.S, it’s a quieter but influential week ahead.

On the economic data front, prelim private sector PMIs for September and weekly jobless claims will influence.

The main event of the week, however, is the FED monetary policy decision and projections.

With the FED expected to stand pat on policy, expect the FED’s economic projections and policy outlook to be key.

The Weekly Wrap – Economic Data and Policy Jitters Delivered a Boost for the Greenback

The Stats

It was a busier week on the economic calendar, in the week ending 17th September.

A total of 61 stats were monitored, which was up from 42 stats in the week prior.

Of the 61 stats, 21 came in ahead forecasts, with 27 economic indicators coming up short of forecasts. There were 13 stats that were in line with forecasts in the week.

Looking at the numbers, 29 of the stats reflected an upward trend from previous figures. Of the remaining 32 stats, 30 reflected a deterioration from previous.

For the Greenback, upbeat economic data and sentiment towards monetary policy delivered support in the week. In the week ending 17th September, the Dollar Spot Index rose by 0.66% to 93.195. In the previous week, the Dollar had risen by 0.59% to 92.582.

Out of the U.S

Early in the week, inflation figures were in focus.

In August, the annual rate of core inflation softened from 4.3% to 4.0% versus a forecasted 4.2%. While softer than expected, 4% continued to sit well above the FED’s 2% target, leaving tapering on the table.

Mid-week, industrial production and NY Empire State manufacturing figures were market positive.

On Thursday, retail sales, Philly FED Manufacturing PMI, and jobless claims figures were of greater interest, however.

In August, retail sales increased by 0.7% versus a forecasted 0.2% decline. Core retail sales jumped by 1.8% versus a 0.1% decline. In July retail sales had fallen by 1.1% and core retail sales by 0.4%.

Manufacturing numbers were also upbeat, with the Philly FED Manufacturing PMI increasing from 19.4 to 30.7 in September.

Jobless claims figures failed to impress, however, with sub-300k remaining elusive. In the week ending 10th September, initial jobless claims rose from 312k to 332k. Economists had forecast an increase to 330k.

At the end of the week, consumer sentiment improved, albeit moderately. In September, the Michigan Consumer Sentiment Index rose from 70.3 to 71.0, falling short of a forecasted 72.0.

Out of the UK

It was also a busy week. Employment, inflation, and retail sales figures were in focus. The stats were skewed to the positive.

In August, claimant counts fell by a further 58.6k after having fallen by 48.9k in July. In July, the unemployment rate fell from 4.7% to 4.6%.

The UK’s annual rate of inflation accelerated from 2.0% to 3.25 in August, also delivering Pound support.

At the end of the week, retail sales disappointed, however. Month-on-month, core retail sales fell by 1.2% in August, following a 3.2% slide in July. Retail sales fell by 0.9% after having fallen by 2.8% in July. Economists had forecast a pickup in spending.

In the week, the Pound fell by 0.71% to end the week at $1.3741. In the week prior, the Pound had fallen by 0.23% to $1.3839.

The FTSE100 ended the week down by 0.93%, following a 1.53% loss from the previous week.

Out of the Eurozone

Economic data included wage growth, industrial production, trade, and finalized inflation figures for the Eurozone.

Finalized inflation figures for Spain, France, and Italy were also out but had a muted impact on the EUR.

In the 2nd quarter, wage fell by 0.4%, year-on-year, partially reversing a 2.1% increase recorded in the previous quarter.

Industrial production and trade data were positive, however.

Production increased by 1.5%, reversing a 0.1% fall from June, with the Eurozone’s trade surplus widening from €17.7bn to €20.7bn.

At the end of the week, finalized inflation figures for the Eurozone were in line with prelim figures. The Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August.

For the week, the EUR fell by 0.75% to $1.1725. In the week prior, the EUR had fallen by 0.56% to $1.1814.

The CAC40 slid by 1.40%, with the DAX30 and the EuroStoxx600 ending the week with losses of 0.77% and 0.96% respectively.

For the Loonie

Economic data included manufacturing sales, inflation, and wholesale sales figures.

The stats were mixed in the week.

In July, both manufacturing sales and wholesale sales disappointed with falls of 1.5% and 2.1% respectively.

Providing support, however, was a pickup in the annual rate of inflation from 3.3% to 3.5%.

The pickup in inflationary pressure and rising oil prices were not enough to support the Loonie against the Greenback.

In the week ending 17th September, the Loonie fell by 0.57% to C$1.2764. In the week prior, the Loonie had fallen by 1.34% to C$1.2692.

Elsewhere

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

The Aussie Dollar fell by 1.05% to $0.7279, with the Kiwi Dollar ending the week down by 1.03% to $0.7040.

For the Aussie Dollar

Business and consumer confidence figures were in focus in the 1st half of the week.

In spite of the latest lockdown measures, the stats were skewed to the positive.

The NAB Business Confidence Index rose from -8 to -5 in August.

More significantly, the Westpac Consumer Sentiment Index increased by 2.0% in September. The index had fallen by 4.4% in August.

On Thursday, employment figures disappointed, however.

In August, full employment fell by 68k following a 4.2k decline in July. Employment tumbled by 146.3k, however, versus a forecasted 90.0k decline. In July, employment had risen by 2.2k.

According to the ABS,

  • The unemployment rate fell from 4.6% to 4.5%, with the participation rate declining from 66.0% to 65.2%.
  • Year-on-year, the number of unemployed was down by 298,000.

For the Kiwi Dollar

It was also a mixed week on the economic data front.

2nd quarter GDP numbers impressed, with the NZ economy expanding by 2.8%, quarter-on-quarter. The economy had expanded by a more modest 1.4% in the previous quarter.

On the negative, however, was a slide in the Business PMI from 62.6 to 40.1 in August. The figures reflected the impact of the latest lockdown measures on production, justifying the RBNZ’s decision to leave the cash rate unchanged.

For the Japanese Yen

It was a relatively quiet week, with the numbers skewed to the negative.

According to finalized figures, industrial production fell by 1.5% in July. While in line with prelim figures, this was a partial reversal of a 6.5% jump from June.

In August, Japan’s trade balance fell from a ¥439.4bn surplus to a ¥635.4bn deficit. Exports rose by 26.2%, year-on-year, after having been up by 37% in July.

The Japanese Yen rose by 0.01% to ¥109.93 against the U.S Dollar. In the week prior, the Yen had fallen by 0.21% to ¥109.94.

Out of China

Fixed asset investment and industrial production figures were in focus mid-week.

There were yet more disappointing numbers from China for the markets to consider.

In August, fixed asset investment increased by 8.9%, year-on-year. This was softer than a 10.3% increase in July.

More significantly, industrial production was up by 5.3% in August versus 6.4% in July.

In the week ending 17th September, the Chinese Yuan fell by 0.34% to CNY6.4661. In the week prior, the Yuan had ended the week up by 0.18% to CNY6.4443.

The CSI300 and the Hang Seng ended the week down by 3.14% and by 4.90% respectively.

European Equities: A Quieter Economic Calendar to Put Support to the Test

Economic Calendar

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

It was a relatively bullish day for the European majors on Thursday.

The CAC40 and the EuroStoxx600 rose by 0.59% and 0.44% respectively, with the DAX30 ending the day up by 0.23%.

While economic data from the Eurozone provided direction, stats from the U.S were key later in the European session.

Impressive economic data from the U.S, which included an unexpected rise in retail sales, delivered the majors with support.

Following softer inflation figures for August, Thursday’s numbers also included a marked jump in the Philly FED Manufacturing PMI.

All in all, the numbers eased concerns over the economic recovery, which had returned following weak numbers from China on Wednesday.

The Stats

It’s a was a quiet day on the Eurozone economic calendar.

Eurozone trade data was in focus early in the European open.

Trade

In July, the Eurozone’s trade surplus widened from €17.7bn to €20.7bn.

According to Eurostat,

  • Euro area exports of goods to the rest of the world increased by 11.4%, year-on-year, to €206.0bn.
  • Imports from the rest of the world jumped by 17.1% to €185.3bn.
  • Intra-euro area trade rose by 16.8%, year-on-year, to €179.7bn.

From the U.S

It was a busy day on the economic calendar. Retail sales, jobless claims, and manufacturing data were in focus.

In August, retail sales increased by 0.7% versus a forecasted 0.2% decline. Core retail sales jumped by 1.8% versus a 0.1% decline. In July retail sales had fallen by 1.1% and core retail sales by 0.4%.

Manufacturing numbers were also upbeat, with the Philly FED Manufacturing PMI increasing from 19.4 to 30.7 in September.

Jobless claims figures failed to impress, however, with sub-300k remaining elusive. In the week ending 10th September, initial jobless claims rose from 312k to 332k. Economists had forecast an increase to 330k.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. Volkswagen fell by a 1.46%, with BMW and Daimler seeing losses of 1.15% and 0.84% respectively. Continental led the way down, however, tumbling by 15.98%. Continental’s slide came in response to the Vitesco unit spinoff.

It was a bullish day for the banks. Deutsche Bank and Commerzbank rose by 1.00% and by 0.82% respectively.

From the CAC, it was a bullish day for the banks. Soc Gen and Credit Agricole ended the day up by 0.50% and by 0.29% respectively. BNP Paribas led the way, however, gaining 0.99%.

It was a mixed day for the French auto sector. Stellantis NV rose by 0.40%, while Renault fell by 1.69%.

Air France-KLM ended the day up by 1.81%, with Airbus SE rallying by 2.24%.

On the VIX Index

It was back into the green for the VIX on Thursday, marking a 4th daily gain in 6 sessions.

Partially reversing a 6.58% fall from Wednesday, the VIX rose by 2.81% to end the day at 18.69.

On Thursday, the NASDAQ rose by 0.13%, while the Dow and S&P500 ended the day down by 0.18% and by 0.16% respectively.

VIX 170921 Daily Chart

The Day Ahead

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

Finalized August inflation figures for the Eurozone are due out later today. Expect any upward revisions to influence.

From the U.S, consumer sentiment figures for September will also provide direction late in the European session.

The Futures

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

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

European Equities: Eurozone Trade Data, Lagarde, and U.S Stats in Focus

Economic Calendar

Thursday, 16th September

Eurozone Trade Balance (Jul)

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

It was a bearish day for the European majors on Wednesday.

The CAC40 and the EuroStoxx600 fell by 1.04% and 0.80% respectively, with the DAX30 ending the day down by 0.68%.

A busier economic calendar provided the majors with direction on the day.

Ahead of the European open, economic data from China set the tone.

Industrial production was up by 5.3%, year-on-year, in August versus a forecasted 5.8% increase. In July, production had been up by 6.4%.

Fixed asset investment was up 8.9% versus a forecasted 9.0%. In July, fixed asset investments had been up 10.3%.

The disappointing numbers from China raised more red flags over the economic outlook.

The Stats

Wage growth and industrial production figures for the Eurozone were the key stats of the day.

In the 2nd quarter, wages fell by 0.4%, quarter-on-quarter. Wages had grown by 2.1% in the previous quarter.

In August, industrial production increased by 1.5%, month-on-month, reversing a 0.1% decline from July. Economists had forecast a 0.6% increase.

Other stats on the day included finalized inflation figures from France and Italy, which had a muted impact on the majors.

From the U.S

In September, the NY Empire State Manufacturing Index rose from 18.3 to 34.3. Economists had forecast a decline to 18.0.

Industrial production figures were also upbeat, with production up 0.4% in August versus a forecasted 0.4% increase. In July, industrial production had risen by 0.8%.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. Volkswagen fell by 0.31% to buck the trend. BMW rallied by 1.24%, however, with Daimler and Continental seeing gains of 0.17% and 0.60% respectively.

It was also a mixed day for the banks. Deutsche Bank rose by 0.23%, while Commerzbank fell by 1.65%.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole ended the day up by 0.45% and by 0.14% respectively. Soc Gen bucked the trend, however, falling by 0.17%.

It was also a mixed day for the French auto sector. Stellantis NV rallied by 2.29%, while Renault slipped by 0.75%.

Air France-KLM and Airbus SE ended the day down by 1.45% and by 0.35% respectively.

On the VIX Index

It was back into the red for the VIX on Wednesday, marking a 2nd loss in 5 sessions.

Reversing a 0.46% gain from Tuesday, the VIX fell by 6.58% to end the day at 18.18.

On Wednesday, the Dow rose by 0.68%, with the NASDAQ and S&P500 ending the day up by 0.82% and by 0.85% respectively.

VIX 160921 Daily Chart

The Day Ahead

It’s a quieter day ahead on the Eurozone’s economic calendar.

Trade data for the Eurozone will be in focus later this morning. With little else for the markets to consider in the early part of the day, expect the numbers to influence.

Economic data from the U.S will likely have a greater impact, however. Retail sales, jobless claims, and Philly FED Manufacturing PMI figures are due out later in the day.

On the monetary policy front, ECB President Lagarde is also scheduled to speak ahead of the U.S numbers.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 28 points.

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

European Stocks Under Pressure From Weak China Data

The benchmark STOXX 600 index fell 0.1% by 07:11 GMT.

Asian stocks tumbled after data showed China’s factory and retail sectors faltered in August following fresh coronavirus outbreaks and supply disruptions.

Travel & leisure stocks were the top decliners in Europe, down 1.1%, with gaming companies hit after Macau casino operator stocks plummeted as the government kicked off a public consultation that investors fear will lead to tighter regulations in the world’s largest gambling hub.

The owner of fashion brand Zara Inditex rose about 1% as its sales approached pre-pandemic levels, but Sweden’s H&M slipped 3% as quarterly sales increased less than expected.

UK’s FTSE 100 edged lower and mid-cap stocks fell 0.2% after data showed British inflation hit a more than nine-year high last month.

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

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

European Equities: Economic Data from China, the Eurozone, and the U.S in Focus

Economic Calendar

Wednesday, 15th September

French CPI (MoM) (Aug) Final

French HICP (MoM) (Aug) Final

Italian CPI (MoM) (Aug) Final

Eurozone Wages in euro zone (YoY) (Q2)

Eurozone Industrial Production (MoM) (Jul)

Thursday, 16th September

Eurozone Trade Balance (Jul)

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

It was a mixed day for the European majors on Tuesday.

The CAC40 and the EuroStoxx600 fell by 0.36% and by 0.01% respectively, while the DAX30 ended the day up by 0.14%.

With economic data from the Eurozone limited to inflation figures from Spain, economic data from the U.S was key on the day,

Softer inflation figures from the U.S did little to shift sentiment towards FED monetary policy, with concerns over economic growth also pegging the majors back.

The Stats

Finalized inflation figures from Spain were in focus on Tuesday.

In August, the annual rate of inflation accelerated from 2.9% to 3.3%, which was in line with prelim figures.

The numbers had a muted impact on the European majors, however.

From the U.S

In August, the annual rate of core inflation softened from 4.3% to 4.0%. Economists had forecast an annual core rate of inflation of 4.2%.

Month-on-month, core consumer prices rose by 0.1%, while consumer prices increased by 0.3%.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Tuesday. Daimler gained 0.97%, with BMW and Continental rising by 0.66% and by 0.55% respectively. Volkswagen ended the day up by a modest 0.27%.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 0.77% and by 1.91% respectively.

From the CAC, it was a bearish day for the banks. Soc Gen and Credit Agricole ended the day down by 1.83% and by 2.54% respectively. BNP Paribas saw a more modest 1.17% loss on the day.

It was a mixed day for the French auto sector, however. Stellantis NV rose by 0.74%, while Renault fell by 0.63%.

Air France-KLM and Airbus SE ended the day down by 1.93% and by 2.02% respectively.

On the VIX Index

It was back into the green for the VIX on Tuesday, marking a 3rd day in the green from 4 sessions.

Partially reversing a 7.54% fall from Monday, the VIX rose by 0.46% to end the day at 19.46.

On Tuesday, the NASDAQ slipped by 0.45%, with the Dow and S&P500 ending the day down by 0.84% and by 0.57% respectively.

VIX 150921 Daily Chart

The Day Ahead

It’s a busier day ahead on the Eurozone’s economic calendar.

Wage growth and industrial production figures for the Eurozone will be key stats on the day. Expect the industrial production figures to have a greater impact on the majors, however.

Finalized inflation figures for France and Italy are also due out but should have a muted impact on the majors.

From the U.S, NY Empire State Manufacturing and industrial production figures will also influence later in the day.

Ahead of the European open, however, economic data from China will set the tone.

Key stats include fixed asset investments and industrial production figures for August, with both needing to see a pickup to ease growth concerns.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 7 points.

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

Luxury, Mining Stocks Weigh on Europe Ahead of U.S. Inflation Data

The pan-European STOXX 600 index was down 0.2% after a partial recovery on Monday from last week’s slump.

Luxury stocks including LVMH, Kering and Richemont fell between 1.6% and 2.0%, tracking their Asian peers lower on concerns about the spread of COVID-19 cases in China.

Jewellery maker Pandora rose 3.7% after it said it aims to achieve sales growth between 6.0% and 8.0% over the coming years.

Mining stocks dragged UK’s commodity-heavy FTSE 100 0.3% lower, even as data showed British employers added a record 241,000 staff to their payrolls last month.

Danish brewer Carlsberg fell 2.6% after a double downgrade to “sell” by Berenberg.

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

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

European Equities: Economic Data from the U.S in Focus Late in the Day…

Economic Calendar

Tuesday, 14th September

Spanish CPI (YoY) (Aug) Final

Spanish HICP (YoY) (Aug) Final

Wednesday, 15th September

French CPI (MoM) (Aug) Final

French HICP (MoM) (Aug) Final

Italian CPI (MoM) (Aug) Final

Eurozone Wages in euro zone (YoY) (Q2)

Eurozone Industrial Production (MoM) (Jul)

Thursday, 16th September

Eurozone Trade Balance (Jul)

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

It was a relatively bullish start to the week for the European majors on Monday.

The CAC40 and the EuroStoxx600 rose by 0.20% and 0.29% respectively, with the DAX30 ending the day up by 0.59%.

A particularly light economic calendar allowed the European markets to claw back some of the previous week’s losses.

Concerns over the economic recovery and outlook remained, however, pegging the majors back from more material gains.

The Stats

There were no major stats from the Eurozone to provide the majors with direction.

From the U.S

There were also no major stats from the U.S to influence the European majors later in the day.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Monday. Volkswagen rose by a modest 0.97% on the day. Daimler rallied by 3.71%, however, with BMW and Continental seeing gains of 3.39% and 3.35% respectively.

It was also a bullish day for the banks. Deutsche Bank and Commerzbank rose by 1.63% and by 1.35% respectively.

From the CAC, it was a bullish day for the banks. Soc Gen and Credit Agricole ended the day up by 1.17% and by 1.29% respectively. BNP Paribas led the way, however, rallying by 2.27%.

It was also a bullish day for the French auto sector. Stellantis NV rose by 1.23%, with Renault rallying by 2.61%.

Air France-KLM ended the day up by 2.21%, with Airbus SE rising by 0.63%.

On the VIX Index

It was back into the red for the VIX on Monday, ending a 2-day winning streak.

Partially reversing an 11.44% jump on Friday, the VIX fell by 7.54% to end the day at 19.37.

On Monday, the NASDAQ slipped by 0.07%, while the Dow and S&P500 ended the day up by 0.76% and by 0.23% respectively.

VIX 140921 Daily Chart

The Day Ahead

It’s a quiet day ahead on the Eurozone’s economic calendar.

Finalized Spanish inflation figures for August will be in focus early in the European session. We don’t expect the numbers to trouble the European majors, however.

From the U.S, inflation figures for August will draw plenty of interest and influence, however. With the FED viewing the spike in inflation as transitory, another jump in inflation would question the policy outlook.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 72 points.

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

European Stocks Snap 4-Day Losing Streak as Oil, Banks Rise

By Sruthi Shankar and Shreyashi Sanyal

The pan-European STOXX 600 index was up 0.3% after hitting a three-week low last week. Asian stocks, however, fell following news of fresh regulatory crackdown on Chinese firms.

Global stocks have come under pressure recently after months-long gains on worries about inflation, tighter COVID-19 curbs in Asian economies, China’s regulatory moves, and growing views that central banks will soon start paring stimulus.

While those concerns remain, European investors took comfort as the European Central Bank last week raised its growth and inflation projections for this year and beyond, as the euro zone economy recovers quicker than expected from the pandemic shock.

“While we are used to seeing US markets lead the way, there is a feeling that we could see greater catch-up for Europe as high vaccination levels keep deaths relatively stable,” said Joshua Mahony, senior market analyst at IG.

Economy-sensitive sectors, including banks, oil and gas, and construction and materials, rose between 0.9% and 2.8%, while utilities climbed 1.6%.

All eyes will be on the U.S. consumer prices data on Tuesday after soaring producer prices last week raised doubts about the U.S. Federal Reserve’s view that inflation is transitory.

“Some central bankers will have you believe they are happy to hold back on tightening for now, we are seeing very clear signs that this spike in inflation is far from fleeting,” IG’s Mahony said.

Meanwhile, a September market sentiment survey published by Deutsche Bank showed an equity market correction of 5%-10% by the end of the year was the overwhelming consensus.

Among individual stocks, German online pet supplies’ retailer Zooplus AG jumped 9.0% after Hellman & Friedman raised its takeover offer to 3.29 billion euros ($3.89 billion) from an initial offer of 3 billion euros.

Associated British Foods dropped 2.4% as fourth-quarter sales at its Primark fashion business were lower than expected, with shopper numbers hurt by public health measures in its major markets.

Valneva plunged 41.6% after the British government ended a COVID-19 vaccine supply deal with the French company, alleging a breach of obligations that Valneva denies.

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

(Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Sherry Jacob-Phillips, Uttaresh.V, William Maclean)

European Equities: A Quiet Economic Calendar Will Leave the Majors in the Hands of the U.S Markets

Economic Calendar

Tuesday, 14th September

Spanish CPI (YoY) (Aug) Final

Spanish HICP (YoY) (Aug) Final

Wednesday, 15th September

French CPI (MoM) (Aug) Final

French HICP (MoM) (Aug) Final

Italian CPI (MoM) (Aug) Final

Eurozone Wages in euro zone (YoY) (Q2)

Eurozone Industrial Production (MoM) (Jul)

Thursday, 16th September

Eurozone Trade Balance (Jul)

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

It was a bearish end to the week for the European majors on Friday.

The CAC40 and the EuroStoxx600 fell by 0.31% and 0.26% respectively, with the DAX30 ending the day down by 0.09%.

Economic data from the Eurozone was limited to finalized inflation figures from Germany, which had a muted impact on the majors.

From the U.S, wholesale inflation figures for August also had a muted impact as the markets responded further to the ECB’s shift in stance on monetary policy.

The Stats

Finalized German inflation figures were in focus ahead of the European open.

In August, consumer prices stalled after having risen by 0.90% in July. Germany’s annual rate of inflation picked up from 3.8% to 3.9%, which was in line with prelim figures.

According to Destatis,

  • The prices of goods increased by 5.6% between August 2020 and August 2021.
  • Energy product prices were up 12.6%, with food prices up 4.6%.
  • Prices for transport equipment (+5.5%) and furniture & lighting equipment (+4.0%) also saw sizeable increases.
  • Year-on-year, services prices were up 2.5%, with the annual rate of inflation excluding energy up 3.0%.

From the U.S

Wholesale inflation was in focus late in the European session.

In August, the U.S annual rate of wholesale inflation accelerated from 7.8% to 8.3%. The core annual rate of wholesale inflation picked up from 6.2% to 6.7%. Month-on-month, the producer price index rose by 0.7% after having risen by 1.0% in July.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Friday. Volkswagen fell by 0.39% to buck the trend on the day. BMW ended the day up by 0.40%, with Daimler and Continental rising by 0.58% and by 0.77% respectively, however.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 0.23% and by 0.15% respectively.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole fell by 1.71% and by 1.09% respectively, while Soc Gen ended the day up by 0.08%.

It was also a mixed day for the French auto sector. Stellantis NV rose by 0.10%, while Renault fell by 0.32%.

Air France-KLM slid by 2.24%, with Airbus SE falling by 0.73%.

On the VIX Index

It was a 2nd consecutive day in the green the VIX on Friday.

Following a 4.68% gain on Thursday, the VIX jumped by 11.44% to end the day at 20.95.

On Friday, the NASDAQ fell by 0.87%, with the Dow and S&P500 ending the day down by 0.78% and by 0.77% respectively.

VIX 130921 Daily Chart

The Day Ahead

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

There are no material stats due out of the Eurozone to provide the majors with direction at the start of the week.

From the U.S, there are also no major stats to provide the majors with direction late in the session.

The lack of stats will leave the majors in the hands of COVID-19 news updates and any central bank chatter on the day.

Late in the day, the majors will likely take direction from the U.S majors.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 80 points.

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

The Week Ahead – A Busy Economic Calendar to Test Market Risk Sentiment…

On the Macro

It’s a busy week ahead on the economic calendar, with 62 stats in focus in the week ending 17th September. In the week prior, 42 stats had also been in focus.

For the Dollar:

Inflation figures for August kick things off on Tuesday. We’ve seen labor market numbers disappoint. Another spike in inflation, however, would raise questions over whether the FED can stand pat on policy.

On Wednesday, industrial production figures will be in focus ahead of a particularly busy Thursday.

Retail sales, Philly FED Manufacturing PMI, and weekly jobless claims will be in focus on Thursday.

Expect retail sales and jobless claims to be key.

At the end of the week, consumer sentiment figures for September will also influence.

In the week ending 10th September, the Dollar Spot Index rose by 0.59% to 92.582.

For the EUR:

It’s a quieter week on the economic data front.

Eurozone 2nd quarter wage growth and July industrial production figures will be in focus on Wednesday.

In the 2nd half of the week, trade data and finalized inflation figures for the Eurozone will also influence.

For the week, the EUR fell by 0.56% to $1.1814.

For the Pound:

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

Employment figures will draw attention on Tuesday. August claimant counts and July’s unemployment rate will be key.

On Wednesday, inflation figures will also draw plenty of attention ahead of retail sales figures on Friday.

The week’s data set should give the BoE enough data to make a more informed decision on the policy front.

The Pound ended the week down by 0.23% to $1.3839.

For the Loonie:

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

Manufacturing sales on Tuesday and wholesale sales figures on Thursday will influence.

For the week, however, August inflation figures due out on Wednesday will be key stat.

While the stats will influence, crude oil prices and OPEC’s monthly report will also provide direction.

The Loonie ended the week down 1.34% to C$1.2692 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

Consumer and business confidence figures will be key on Tuesday and Wednesday.

On Wednesday, inflation figures will also draw interest, though expect employment figures on Thursday to have a greater impact.

Following the latest lockdown measures and the RBA’s more dovish stance, the markets will be looking to assess the damage.

The Aussie Dollar ended the week down by 1.39% to $0.7356.

For the Kiwi Dollar:

It’s another quiet week ahead.

2nd quarter GDP numbers are due out on Thursday ahead of Business PMI numbers on Friday.

Expect the GDP numbers to be key. While the RBNZ hit pause on lifting rates, the markets will be expecting solid numbers.

The Kiwi Dollar ended the week down by 0.63% to $0.7113.

For the Japanese Yen:

BSI large manufacturing conditions data for Q3 and trade data for August due out on Monday and Thursday will be key.

Finalized industrial production figures on Tuesday should have a muted impact on the Yen and the Asian markets…

The Japanese Yen fell by 0.21% to ¥109.94 against the U.S Dollar.

Out of China

Fixed asset investment, industrial production, and retail sales figures on Wednesday will be in focus.

Expect industrial production and retail sales figures to be the key numbers…

The Chinese Yuan ended the week up by 0.18% to CNY6.4443 against the U.S Dollar.

Geo-Politics

Iran, China, and Russia remain the main areas of interest for the markets. News updates from the Middle East, in particular, will need monitoring following recent events in Afghanistan.

European Equities: A Week in Review – 10/09/21

The Majors

It was a bearish week for the majors in the week ending 10th September. The DAX30 and the EuroStoxx600 slid by 1.09% and by 1.18% respectively. After bucking the trend in the previous week, the CAC40 saw a more modest 0.39% loss in the week.

Economic data from Germany failed to support the majors, in spite of the stats being skewed to the positive.

Concerns over the economic recovery, stemming from the spread of the Delta variant, weighed on the majors.

Economic data from China and the U.S also failed to support the majors, in spite of better-than-expected numbers.

In August, China’s U.S Dollar trade surplus widened from $56.59bn to $58.35bn, with exports up 25.6% year-on-year, and imports up 33.1%. In July, imports had been up by 28.1% and exports up by 19.3%. Economists had forecast the trade surplus to narrow from $56.59bn to $51.05bn.

The Stats

Economic data included factory orders, industrial production, and trade data from Germany.

While the stats were skewed to the positive, there was little support for the majors, with the markets looking ahead to the ECB policy decision.

ZEW Economic Sentiment figures for Germany and the Eurozone were disappointing, however, pegging the majors back.

At the end of the week, finalized inflation figures from Germany had a muted impact on the majors.

While there were plenty of stats for the markets to consider, it was ultimately the ECB monetary policy decision and press conference that was the main event.

In line with market expectations, the ECB held policy unchanged and talked of economic uncertainty stemming from the Delta variant. Lagarde did confirm plans to modestly reduce the asset purchasing program.

While supporting the majors on the day, the Thursday press conference marked the beginnings of the end to pandemic measures.

From the U.S

Early in the week, JOLT’s job openings for July were upbeat with openings rising from 10.185m to 10.943m. Economists had forecast a decline to 10.000m.

On Thursday, jobless claims were also impressive. In the week ending 3rd September initial jobless claims fell from 345k to 310k.

At the end of the week, wholesale inflation was in focus. In August, the core PPI rose by 0.6% versus a forecasted 0.5%, with the Producer Price Index rising by 0.7% versus a forecasted 0.6%. Both had risen by 1.0% in July.

The Market Movers

From the DAX, it was a bearish week for the auto sector. Volkswagen slid by 3.46%, with Continental and Daimler ending the week down by 2.84% and by 1.65% respectively. BMW saw a more modest 0.40% loss in the week.

It was a bullish week for the banking sector, however. Deutsche Bank rallied by 2.32%, with Commerzbank rising by 0.55%.

From the CAC, it was a bearish week for the banks. BNP Paribas and Credit Agricole fell by 1.95% and by 1.24% respectively, with Soc Gen ending the week down by 0.49%.

It was also a bearish week for the French auto sector. Stellantis NV and Renault slid by 2.46% and by 2.86% respectively.

Air France-KLM fell by a further 3.39%, with Airbus ending the week with a 0.1% loss.

On the VIX Index

It was a 2nd consecutive week in the green for the VIX in the week ending 10th September.

Following an 0.12% rise from the previous week, the VIX jumped by 27.67% to end the week at 20.95.

3-days in the green from 4 sessions, which included a 11.44% rise on Friday delivered the upside.

For the week, the Dow slid by 2.15%, with the NASDAQ and the S&P500 falling by 1.61% and by 1.69% respectively.

VIX 110921 Weekly Chart

The Week Ahead

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

Key stats include industrial production and trade data for the Eurozone, the numbers due out on Wednesday and Thursday.

Finalized inflation figures for member states and the Eurozone are also due out in the week.

Barring any marked revisions from prelim figures, expect the Eurozone’s numbers to have a greater influence.

From the U.S, it’s a busy week ahead, with inflation and industrial production in focus early in the week.

On Thursday, retail sales and jobless claims figures will also have a material impact on market risk sentiment.

Consumer sentiment figures for September wraps things up on Friday.

We can also expect economic data from China to influence in the week.

Industrial production, fixed asset investment, and retail sales figures will be in focus on Wednesday.

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

The Weekly Wrap – Dovish Central Banks and Concerns over the Recovery Delivered Dollar Support

The Stats

It was a quieter week on the economic calendar, in the week ending 10th September.

A total of 42 stats were monitored, which was down from 81 stats in the week prior.

Of the 42 stats, 20 came in ahead forecasts, with 21 economic indicators coming up short of forecasts. There was just 1 stat that was in line with forecasts in the week.

Looking at the numbers, 21 of the stats reflected an upward trend from previous figures. Of the remaining 21 stats, 21 reflected a deterioration from previous.

For the Greenback, dovish FOMC member chatter failed to deliver Dollar weakness. Concerns over the economic recovery and dovish central banks drove Dollar demand in the week. In the week ending 10th September, the Dollar Spot Index rose by 0.59% to 92.582. In the previous week, the Dollar had fallen by 0.59% to 92.137.

Out of the U.S

Early in the week, JOLT’s job openings for July were upbeat with openings rising from 10.185m to 10.943m. Economists had forecast a decline to 10.000m.

On Thursday, jobless claims were also impressive. In the week ending 3rd September initial jobless claims fell from 345k to 310k.

At the end of the week, wholesale inflation was in focus. In August, the core PPI rose by 0.6% versus a forecasted 0.5%, with the Producer Price Index rising by 0.7% versus a forecasted 0.6%. Both had risen by 1.0% in July.

Out of the UK

Economic data was on the busier side. Early in the week, construction PMI and BRC retail sales monitor figures were skewed to the negative.

In August, the construction PMI fell from 58.7 to 55.2, with the BRC Retail Sales Monitor rising by just 1.5%. The Retail Sales Monitor had risen by 4.7%, year-on-year, in July.

At the end of the week, key stats included GDP, manufacturing and industrial production, and trade data.

In July, the UK economy expanded by 0.1% and grew by 7.5% year-on-year.

While industrial production rose by 1.2%, manufacturing production stalled in July.

Trade figures were mixed, however. The UK’s trade deficit widened from £11.99bn to £12.71bn in July, while the non-EU deficit narrowed from £7.19bn to £6.99bn.

In the week, the Pound fell by 0.23% to end the week at $1.3839. In the week prior, the Pound had risen by 0.78% to $1.3871.

The FTSE100 ended the week down by 1.53%, following a 0.14% loss from the previous week.

Out of the Eurozone

Economic data included factory orders, industrial production, and trade data from Germany.

While the stats were skewed to the positive, there was little support for the EUR, with the markets looking ahead to the ECB policy decision.

ZEW Economic Sentiment figures for Germany and the Eurozone were disappointing, however, pegging the EUR back.

At the end of the week, finalized inflation figures from Germany had a muted impact on the majors.

While there were plenty of stats for the markets to consider, it was ultimately the ECB monetary policy decision and press conference that was the main event.

In line with market expectations, the ECB held policy unchanged and talked of economic uncertainty stemming from the Delta variant. Lagarde did confirm plans to modestly reduce the asset purchasing program. The forward guidance was not enough to deliver a EUR rally, however.

For the week, the EUR fell by 0.56% to $1.1814. In the week prior, the EUR had risen by 0.70% to $1.1880.

The CAC40 fell by 0.39%, with the DAX30 and the EuroStoxx600 ending the week with losses of 1.09% and 1.18% respectively.

For the Loonie

Economic data included Ivey PMI and employment figures for August.

The stats were skewed to the positive. In August, the Ivey PMI rose from 56.4 to 66.0, with Canada’s unemployment rate falling from 7.5% to 7.1%.

While the stats were upbeat, the Bank of Canada’s monetary policy decision and forward guidance weighed.

In line with expectations, the BoC left policy unchanged, with the BoC also taking a cautious view on the economic recovery. Supply chain disruption and the Delta variant remained key concerns…

In the week ending 10th September, the Loonie fell by 1.34% to C$1.2692. In the week prior, the Loonie had risen by 0.76% to C$1.2524.

Elsewhere

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

The Aussie Dollar slid by 1.39% to $0.7356, with the Kiwi Dollar ending the week down by 0.63% to $0.7113.

For the Aussie Dollar

There were no major stats for the markets to consider.

On Tuesday, the RBA delivered it’s September monetary policy decision, which was in line with expectations.

The RBA left policy unchanged and talked of the likely impact of the latest lockdown measures on the economy.

For the Kiwi Dollar

It was a quiet week, with retail sales in focus.

In August, electronic card retail sales tumbled by 19.8%, with the decline attributed to the latest lockdown measures introduced in mid-August.

The markets were forgiving, however, with a material decline in retail sales expected.

For the Japanese Yen

It was a relatively busy week, with the numbers skewed to the positive.

In July, household spending rose by 0.7%, month-on-month, coming in ahead of a forecasted 0.1% rise. Spending had tumbled by 5.1% in June. Year-on-year, spending was down by 0.9%, however, versus a forecasted 1.1% increase. Spending had been down by 3.2% in June, year-on-year.

In the 2nd quarter, the Japanese economy expanded by 0.5%, which was up from a prelim 0.4%. The economy had contracted by 0.9% in the previous quarter. Year-on-year, the economy grew by 1.9%, which was up from a prelim 1.6%. In the 1st quarter, the economy had contracted by 3.7%.

The Japanese Yen fell by 0.21% to ¥109.94 against the U.S Dollar. In the week prior, the Yen had risen by 0.12% to ¥109.72.

Out of China

Trade and inflation figures were in focus in the week.

In August, China’s U.S Dollar trade surplus widened from $56.59bn to $58.35bn. Economists had forecast a narrowing to $51.05bn. Exports rose by 25.6% versus a forecasted 17.1% increase, with imports up 33.1%. Economists had forecast imports to rise by 26.8%.

Inflation figures were skewed to the negative, however, with the annual rate of inflation softening from 1.0% to 0.8%. In August, consumer prices rose by just 0.1% after having risen by 0.3% in July.

Wholesale inflationary pressures were still evident, however. The annual rate of wholesale inflation picked up from 9.0% to 9.5% in August.

In the week ending 10th September, the Chinese Yuan rose by 0.18% to CNY6.4443. In the week prior, the Yuan had ended the week up by 0.25% to CNY6.4560.

The CSI300 and the Hang Seng ended the week up by 1.17% and by 3.52% respectively.

European Equities: A Light Economic Calendar to Test Support ahead of the U.S Open

Economic Calendar

Friday, 10th September

German CPI (MoM) (Aug) Final

The Majors

It was a mixed day for the European majors on Thursday.

The DAX30 and the CAC40 saw modest gains of 0.08% and 0.24% respectively, while the EuroStoxx600 slipped by 0.04%.

Economic data had a limited impact on the majors, in spite of positive numbers from Germany and the U.S.

The ECB’s monetary policy decision and press conference delivered much-needed support to the majors, however.

Through the early part of the sessions, concerns over a more hawkish shift on monetary policy had weighed on the majors.

Plans to modestly cut the pandemic’s emergency bond purchasing program was good enough to leave the majors relatively flat.

The Stats

German trade data was in focus going into the European open.

In July, Germany’s trade surplus widened from €13.6bn to €17.9bn. Economists had forecast a narrowing to €13.0bn

According to Destatis,

  • Exports were up 0.5% on the previous month and up by 12.4% on the same month a year earlier.
  • Imports were down 3.8% on the previous month, while up 16.6% on the same month a year earlier.

Trade with EU Countries:

  • Goods exports to EU member states rose by 17.7%, year-on-year, with imports up 18.7%.
  • To euro area countries, exports rose by 17.4%, with imports from euro area countries up 22.4%.
  • Exports to EU countries not belonging to the euro area increased by 18.4%, while imports were up by 11.0%.

Trade with non-EU Countries:

  • Exports to third countries increased by 6.8%, with imports from third countries up 14.2%.

Trade with the UK:

  • Compared with the same month last year, exports were up 7.2% to the UK. Imports from the UK increased by 15.6%.

Elsewhere:

Exports to China fell by 4.3%, year-on-year, while exports to the U.S were up 15.7%.

From the U.S

Jobless claim figures were in focus, though the stats had a muted impact, with the release coinciding with the ECB press conference.

In the week ending 3rd September, initial jobless claims fell from 345k to a post-pandemic low 310k. Economists had forecast a decline to 335k.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Volkswagen and BMW ended the day up by 0.84% and by 0.03% respectively. Daimler and Continental fell by 0.15% and by 0.55% respectively, however.

It was also a mixed day for the banks. Deutsche Bank rose by 0.14%, while Commerzbank slid by 2.10%.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.45% and by 0.17% respectively, with Soc Gen ending the day up by 0.57%.

It was a mixed day for the French auto sector, however. Stellantis NV rose by 0.40%, while Renault fell by 0.47%.

Air France-KLM joined airline stocks in the red, falling by 0.97%, while Airbus SE rose by 1.30%.

On the VIX Index

It was back into the green the VIX on Thursday.

Reversing a 0.99% fall from Wednesday, the VIX rose by 4.68% to end the day at 18.80.

On Thursday, the NASDAQ fell by 0.25%, with the Dow and S&P500 ending the day down by 0.43% and by 0.46% respectively.

VIX 100921 Daily Chart

The Day Ahead

It’s a quieter day ahead on the Eurozone’s economic calendar.

Finalized August inflation figures for Germany are due out going into the European open.

Barring a marked revision from prelim figures, however, the numbers should have a muted impact on the majors. On Thursday, the ECB stood by its transitory view on inflation. That should limit the impact of any marginal upward revision.

From the U.S, wholesale inflation figures will likely have a greater impact, however. A spike in wholesale inflation could give the FOMC hawks firmer footing for a near-term shift in policy, albeit a tapering to the asset purchasing program.

Following a pullback in the U.S markets on Thursday, concerns over the economic outlook will likely remain a factor with little on the economic calendar for the markets to consider.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 9 points.

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

U.S. Shares Retreat, European Shares end Little-Changed

Major U.S. indexes were lower, pulling back from earlier gains but still close to all-time highs.

The Dow Jones Industrial Average fell 133.74 points, or 0.38%, to 34,897.33, the S&P 500 lost 14.45 points, or 0.32%, to 4,499.62 and the Nasdaq Composite dropped 4.28 points, or 0.03%, to 15,282.36 by mid afternoon.

Federal Reserve Bank Governor Michelle Bowman added her voice Wednesday to the growing number of policymakers who say the weak August jobs report likely won’t throw off the central bank’s plan to trim its $120 billion in monthly bond purchases later this year.

Earlier in the day, U.S. data showed the number of Americans filing new claims for jobless benefits fell to the lowest level in nearly 18 months last week, offering more evidence that job growth was being hindered by labor shortages rather than cooling demand for workers.

After falling as much as 0.9% in morning trade, the pan-European STOXX 600 index ended largely unchanged around 467.57 points. The index had shed 1.5% over the past two days on fears of a more-hawkish-than-expected ECB.

Euro zone bonds yields tumbled as the European Central Bank took its first tentative step in withdrawing COVID-era stimulus. Southern Europe led a fall in euro zone sovereign bond yields.

The euro rose 0.15% against the dollar, climbing for the first time in four sessions, while bond markets cheered by sending French 10-yields negative again.

“We’re seeing some modest weakness mainly because the market is just in flux. There is no real clarity on when we will start to see the Fed and ECB start to pull back stimulus,” said Edward Moya, a senior market analyst with OANDA in New York.

Instead of hinting at any potential end date for its pandemic-era purchase programme, European Central Bank President Christine Lagarde instead channelled the spirit of former British Prime Minister Margaret Thatcher, saying: “The lady isn’t tapering.”

Germany’s 10-year yield, the benchmark for the bloc, fell. [GVD/EUR]

FRAGILE CHINA

MSCI’s benchmark for global equity markets fell 0.33% to 740.33. Emerging markets stocks fell 1.18%.

The UK’s FTSE 100 dropped 1% with low-cost airline easyJet tumbling over 10% as it tapped shareholders for 1.2 billion pounds ($1.7 billion). [.EU]

MSCI’s broadest index of Asia-Pacific shares ended down 1%, which was its worst daily performance since Aug. 19, the last time markets decided they were worried about the U.S. Federal Reserve tapering its massive asset purchase programme.

Chinese tech giants Tencent, NetEase and Alibaba had slumped 8.5%, 11% and 6% respectively after online gaming chiefs were summoned by authorities to check they are sticking to strict new rules for the sector.

“The global story is looking soft and it’s being hit by the Delta variant plus concern about potentially the Fed still moving towards a taper,” said Rob Carnell, Asia head of research at ING. “It’s an unsettling combination of things.”

The China angst had meant Hong Kong, where many heavyweight Chinese firms are also listed, shed 2.3%.

News that Chinese authorities had told gaming firms to resolutely curb incorrect tendencies such as focusing “only on money” and “only on traffic” had hurt companies with large gaming operations. Tencent fell 8.5%, Bilibili lost nearly 9% and NetEase slumped 11%.

There was more turbulence too for the country’s most indebted property giant, Evergrande.

Media reports the company would suspend some interest payments on loans and payments to its wealth management products sent its shares down more than 10% at one point, although they recovered almost half of the drop on news that some creditors had agreed to loan payment extensions.

Korea’s Kospi fell 1.5%, also under pressure from regulatory scrutiny of local tech players. In Korea’s case, fintech names such as Kakao Corp , which sank 7.2%, and Naver Corp, down 6.9%, were in the spotlight.

Australian stocks lost nearly 2% after payrolls data showed a sharp drop in jobs in the first half of August.

Gold steadied in choppy trading, buoyed by a slight retreat in the dollar. Spot bullion prices were up 0.4%.

Oil prices fell on China’s plan to tap state reserves and a smaller-than-expected drawdown in U.S. crude supplies.

Brent crude was last down $1.14, or down 1.57%, at $71.46 a barrel. U.S. crude was last down $1.16, or down 1.66% at %68.15.

($1 = 0.7246 pounds)

(Additional reporting by Alun John in Hong Kong; Editing by Carmel Crimmins and Nick Zieminski)

European Stocks Slide Ahead of ECB Meeting, EasyJet Tumbles

The continent-wide STOXX 600 index was down 0.8%, hitting a three-week low, with UK’s FTSE 100 leading losses with a 1.1% drop and Germany’s DAX touching over a one-month low.

British airline easyJet tumbled 13.8% after it revealed plans to raise 1.2 billion pounds ($1.7 billion) and said it had rejected a takeover offer.

Travel stocks, down 1.8%, fell the most among sectors, while miners, technology and automakers dropped between 1.0% and 1.4%.

The ECB is expected to slow its bond buying via its Pandemic Emergency Purchase Programme (PEPP), according to a Reuters poll, but also reassure markets that this is not the start of a gradual exit from easy policy.

Asian shares dropped more than a percent, with Chinese gaming stocks coming under pressure from fresh regulatory scrutiny, while data showed China’s factory gate inflation hit a 13-year high in August.

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

(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)