European Equities: Economic Data and Trade Talk to Drive the Majors

Economic Calendar:

Tuesday, 12th November

  • German ZEW Current Conditions (Nov)
  • German ZEW Economic Sentiment (Nov)
  • Eurozone ZEW Economic Sentiment (Nov)

Wednesday, 13th November

  • German CPI (MoM) (Oct) Final
  • Eurozone Industrial Production (MoM) (Sep)

Thursday, 14th November

  • German GDP (QoQ) (Q3) 1st Estimate
  • German GDP (YoY) (Q3) 1st Estimate
  • French CPI (MoM) (Oct) Final
  • French HICP (MoM) (Oct) Final
  • Spanish CPI (YoY) (Oct) Final
  • Spanish HICP (YoY) (Oct) Final
  • Eurozone GDP (QoQ) (Q3) 2nd Estimate
  • Eurozone GDP (YoY) (Q3) 2nd Estimate

Friday, 15th November

  • Italian CPI (MoM) (Oct) Final
  • Eurozone Core CPI (YoY) (Oct) Final
  • Eurozone CPI (MoM) (Oct)
  • Eurozone CPI (YoY) (Oct) Final
  • Eurozone Trade Balance (Sep)

The Majors

It was a mixed start to the week for the European majors. The DAX30 and EuroStoxx600 fell by 0.23% and 0.02% respectively, while the CAC40 eked out a 0.07% gain.

With no material economic data from the Eurozone to provide direction, geopolitics was front and center once more.

Optimism over a phase 1 trade agreement deteriorated at the start of the week. The markets responded to news of Trump saying that he had not agreed to roll back tariffs.

Last Thursday, the majors had found support on news of Beijing and Washington agreeing to remove some tariffs…

While trade angst was the main cause of the mixed session, events in HK at the start of the week didn’t help. Shootings and more left the Hang Seng down by 2.62%, its largest single-day slide since the summer.

The Stats

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

With no material stats from the U.S to influence, geopolitics provided direction on the day.

The Market Movers

For the DAX: It was a bearish start to the week for the auto sector, as the markets responded to the latest chatter on trade. Volkswagen led the way, falling by 0.36%, with Continental down by 0.30%. BMW and Daimler saw more modest losses of 0.04% and 0.15% respectively.

It was no better for the banks, with Commerzbank and Deutsche Bank falling by 0.72% and 0.51% respectively.

From the CAC, it was a mixed start to the week for bank stocks. Soc Gen and Credit Agricole rose by 1.30% and by 1.10% respectively, while BNP Paribas fell by 0.37%.

It was bearish for the autos, however, with Peugeot and Renault falling by 0.46% and by 1.24% respectively.

On the VIX Index

It was a positive start to the week for the VIX, which rose by 5.14% on Monday. Reversing a 5.18% fall from Friday, the VIX ended the day at 12.7.

The upside came as the markets responded to news of the U.S President denying any agreement to roll back tariffs on Chinese goods.

On the day, the S&P500 fell by 0.2%, recording its 2nd day in the red in the last 8 trading sessions.

VIX 12/11/19 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. November’s ZEW Economic sentiment and current conditions figures are due out of Germany and the Eurozone.

We can expect the DAX30 to be particularly sensitive to the numbers. While Germany’s economic sentiment figure tends to have the greatest influence, expect the Eurozone’s economic sentiment figure to also provide direction.

On the geopolitical risk front, we can expect any chatter on trade to provide direction throughout the day.

U.S President Trump is scheduled to speak at the Economic Club of New York, which will likely garner plenty of attention.

Corporate earnings will also be in focus on the day. Infineon Technology’s earnings results are due out later this morning.

In the futures market, at the time of writing, the DAX30 was down by 5 points, with the Dow down by 16 points.

European Equities: Corporate Earnings and Trade Chatter in Focus

Economic Calendar:

Tuesday, 12th November

  • German ZEW Current Conditions (Nov)
  • German ZEW Economic Sentiment (Nov)
  • Eurozone ZEW Economic Sentiment (Nov)

Wednesday, 13th November

  • German CPI (MoM) (Oct) Final
  • Eurozone Industrial Production (MoM) (Sep)

Thursday, 14th November

  • German GDP (QoQ) (Q3) 1st Estimate
  • German GDP (YoY) (Q3) 1st Estimate
  • French CPI (MoM) (Oct) Final
  • French HICP (MoM) (Oct) Final
  • Spanish CPI (YoY) (Oct) Final
  • Spanish HICP (YoY) (Oct) Final
  • Eurozone GDP (QoQ) (Q3) 2nd Estimate
  • Eurozone GDP (YoY) (Q3) 2nd Estimate

Friday, 15th November

  • Italian CPI (MoM) (Oct) Final
  • Eurozone Core CPI (YoY) (Oct) Final
  • Eurozone CPI (MoM) (Oct)
  • Eurozone CPI (YoY) (Oct) Final
  • Eurozone Trade Balance (Sep)

The Majors

It was a bearish end to the week for the European majors as a run of 5 consecutive days in the green came to an end on Friday.

The DAX30 led the way down, falling by 0.46%, with the EuroStoxx600 and CAC40 ending the day with losses of 0.28% and 0.02%.

Economic data on the day had a muted impact on the European majors as the markets tracked trade chatter throughout the day.

Doubts reappeared over whether the U.S and China were, in fact, closer to a Phase 1 trade agreement after news hit the wires of U.S President Trump’s unwillingness to roll back tariffs.

On the earnings front, Credit Agricole weighed on the banking sector.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Friday. Key stats from the Eurozone included September trade data out of Germany and 3rd quarter nonfarm payroll figures out of France.

According to Destatis,

  • Germany’s trade surplus widened from €18.7bn to €19.2bn in September. Economists had forecast a surplus of €18.1bn
  • Month-on-month, exports rose by 1.5% and by 4.6%, year-on-year, to €114.2bn.
  • Imports rose by 1.3%, month-on-month, and by 2.3%, year-on-year, to €93.0bn.
  • Month-on-month, Germany exported €68.4bn of goods to EU member states in September, while importing €53.6bn from EU member states.
  • Germany exported €43.0bn worth of goods to Eurozone member states while importing €34.4bn worth.
  • The exports of goods to countries outside of the EU stood at €45.7bn, while exports totaled €39.4bn.

Out of France, non-farm payrolls increased by 0.3% in the 3rd quarter, following a 0.2% rise in the 2nd quarter, according to figures released by Insee.

The Market Movers

For the DAX: It was a mixed end to the week for the auto sector, as the markets responded to the latest chatter on trade. BMW bucked the trend on the day, rallying by 1.11%, while Continental (-0.73%), Daimler (-0.28%), and Volkswagen (-0.80%) all saw red.

It was no better for the banks on the day. Deutsche Bank fell by 1.92%, with Commerzbank sliding by 3.07%.

From the CAC, bank stocks also saw red at the end of the week. Credit Agricole led the way, sliding by 2.31%. Soc Gen and BNP Paribas saw more modest losses of 1.03% and 1.23% respectively.

Credit Agricole pressured the banking sector following its 3rd quarter earnings release on Friday. While net profit beat estimates, a slide in net income from the retail operation weighed, with net interest income also declining in the quarter.

It was also a mixed day for the autos. While Peugeot rose by 0.50%, Renault fell by 1.48%.

On the VIX Index

It was back into the red for the VIX, which fell by 5.18% on Friday. Reversing a 0.87% rise from Thursday, the VIX ended the day at 12.1.

The loss came as the U.S majors recovered from negative territory in the day to close out with modest gains.

Negative sentiment towards trade had weighed on risk appetite over the course of the day, limiting the upside for the S&P500 to just 0.26%.

VIX 11/11/19 Daily Chart

The Day Ahead

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

A lack of stats will leave the majors in the hands of geopolitical risk and corporate earnings.

On the geopolitical risk front, we can expect any chatter on trade and UK politics to provide direction throughout the day.

Corporate earnings will also be in focus on the day. Continental’s earnings results will provide direction to the auto sector.

In the futures market, at the time of writing, the DAX30 was down by 9.5 points, with the Dow down by 66 points.

European Equities: A Week in Review – 08/11/19

The Majors

It was yet another positive week for the European majors, with the CAC40 up by 2.20% to lead the way. The DAX30 wasn’t far behind, rising by 2.06%, while Eurostoxx600 saw a more modest gain of 1.50%.

For the DAX30 and EuroStoxx600, 0.46% and 0.28% losses respectively on Friday pulled back the pair, while the CAC40 ended the day flat.

Corporate earnings and economic data were in focus in the week as was chatter from the U.S and China on trade.

On the trade front, the majors found strong support from news of Beijing and Washington agreeing to rollback some tariffs.

This came off the back of news that Washington was preparing to issue licenses to U.S firms to do business with Huawei Technologies.

Four days in the green out of five delivered the solid gains for the week.

A pullback on Friday came as a result of the news of disagreements within Washington over the removal of tariffs on Chinese goods.

The Stats

It was another busy week on the Eurozone economic calendar.

In a busy first half of the week, October private sector PMIs, Eurozone retail sales figures, and German factory orders were in focus.

On the PMI front, Spain’s manufacturing sector deteriorated further, with the PMI falling from 47.7 to 46.8. The numbers were more upbeat elsewhere, with the French manufacturing PMI rising from 50.5 to 50.7.

In spite of the positive numbers, Italy, Germany, and the Eurozone’s manufacturing PMIs continued to sit at sub-50 levels.

On Wednesday, service sector PMIs were also skewed to the positive. While Spain’s services PMI fell from 53.3 to 52.7, it was positive for the rest of the member states.

The positively skewed numbers led to a rise in the composite PMI from 50.2 to 50.6.

In spite of the positive numbers, the composite PMI remained close to September’s six-and-a-half-year low.

Out of Germany, factory orders rose by 1.3%, reversing a 0.4% decline in August, providing support, with Eurozone retail sales up by 0.1%.

On Thursday, German industrial production figures failed to pin back the European majors, in spite of a 0.6% decline. The upbeat factory order numbers pointed to a pickup in industrial production at the start of the 4th quarter.

German trade data wrapped things up on Friday. A widening in the trade surplus from €18.1bn to €19.2bn failed to make it a 6th consecutive day in the green for the DAX.

The Market Movers

From the DAX, it was a bullish week for the auto sector. BMW led the way for the week once more, rallying by 8.05. Volkswagen and Continental also saw solid gains, rising by 5.22% and 6.94% respectively. Daimler trailed the pack in the week, rising by just 1.52%.

It was also a bullish week for the banking sector, in spite of a sharp pullback on Friday. Deutsche Bank rallied by 4.54%, with Commerzbank up by 2.57%.

From the CAC, the banks also found strong support, reversing previous week losses. Soc Gen led the way, rallying by 9.78%, with BNP Paribas up by 7.50%. Credit Agricole made a more modest 4.33% gain, with a 2.31% slide on Friday limiting the upside.

Credit Agricole’s slide on Friday came off the back of the bank’s quarterly earnings results. While net profit beat estimates, a slide in net income from the retail operation weighed, as net interest income declined in the quarter.

The French auto sector also saw green. Peugeot rose by 3.25%, while Renault eked out a 0.04% gain.

On the VIX Index

The VIX Index fell 1.87% in the week ending 8th November. Following on from a 2.77% decline from the previous week, the VIX ended the week at 12.1.

In spite of 3 days in the green out of 5, the weekly loss came as a result of the U.S and China’s progress on trade talks.

Throughout the week, economic data provided support, with the stats skewed to the negative for the Greenback.

VIX 09/11/19 Weekly Chart

The Week Ahead

It’s a busy week on the Eurozone economic calendar. November ZEW economic sentiment figures for Germany and the Eurozone are due out on Tuesday.

Following the IMF’s Regional Economic Outlook Report last week, we can expect the majors to be particularly sensitive to consumer sentiment and spending figures.

Eurozone industrial production figures for September will provide direction on Wednesday, ahead of 3rd quarter GDP numbers on Thursday.

Barring a revision to 1st estimate numbers for the Eurozone, Germany’s 1st estimate GDP numbers will have the greatest influence. Forecasts are for the German economy to contract by 0.1%.

The Eurozone’s September trade figures will wrap up the week, with forecasts market positive.

Barring particularly dire numbers, we would expect finalized October inflation figures to have a muted impact throughout the week.

From outside of the Eurozone, expect China industrial production figures, due out on Thursday to also provide direction.

On the geopolitical front, chatter from Beijing and the U.S on trade requires monitoring. There is also UK politics to consider.

There are also corporate earnings to track throughout the week, with Continental and Infineon Tech likely to garner plenty of attention.

European Equities: Can They Make it 6-in-a-row? The Futures Say No…

Economic Calendar:

Friday, 8th November

  • German Trade Balance (Sep)
  • French Non-Farm Payrolls (QoQ) (Q3)

The Majors

It was another bullish day for the European majors, which saw their 5th consecutive day in the green. The DAX30 led the way, rising by 0.84%, with the CAC40 and EuroStoxx600 up by 0.41% and by 0.37% respectively.

While economic data continued to disappoint, positive updates from the ongoing U.S – China trade talks provided support.

News of both the U.S and China agreeing to roll back a portion of existing tariffs as part of the Phase 1 agreement delivered the upside.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Thursday. Key stats from the Eurozone was limited to German industrial production figures for September.

According to Destatis,

  • Industrial production fell by 0.6% in September, month-on-month, reversing a 0.3% rise in August. Economists had forecast a fall of 0.4%.
  • Production in industry excluding energy and construction fell by 1.3%.
  • Within industry, the production of intermediate goods fell by 1.3% and the production of capital goods by 1.5%.
  • The production of consumer goods fell by a more modest 0.5%.
  • Outside industry, energy production rose by 2.0%, with the production in construction up by 1.8%.
  • Year-on-year, production fell by 4.3%.

The Market Movers

For the DAX: It was a bullish day for the auto sector, as the markets brushed aside yet more negative data out of Germany. Daimler and Volkswagen led the way, rallying by 2.39% and by 2.38% respectively. BMW and Continental also made solid gains, rising by 1.38% and by 1.66% respectively.

It was mixed for the banks, however. While Deutsche Bank rallied by 2.26%, Commerzbank fell by 0.16%.

Commerzbank saw red as the bank cut its full-year profit outlook for 2019 on Thursday.

From the CAC, bank stocks found support. Credit Agricole led the way, rallying by 3.37%. Soc Gen and BNP Paribas also saw solid gains, rising by 2.85 % and by 2.95% respectively.

It was also a mixed day for the autos, however. While Peugeot ended the day flat, Renault rose by 2.83%.

On the VIX Index

The VIX Index rose by 0.87% on Thursday. Partially reversing a 3.66% decline from Wednesday, the VIX ended the day at 12.7

Support kicked in late in the day as the U.S majors gave up some of their gains from earlier in the day.

The upside came in spite of news hitting the wires of the U.S and China finding common ground on how to remove tariffs.

VIX 08/11/19 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. Key stats due out of the Eurozone include German trade data for September and 3rd quarter nonfarm payroll figures out of France.

Barring dire numbers, Germany’s trade data will likely have the greatest influence.

Chatter from the gathering of EU finance ministers will also need monitoring on the day.

Ahead of the European session, October trade data out of China will set the tone. While forecasts are for the trade surplus to widen, both exports and imports are forecasted to slide. Worse than forecasts would place pressure on the majors at the open.

From the U.S, prelim consumer sentiment figures for November will likely have a muted impact on the European majors late in the session.

On the geopolitical risk front, we can expect any chatter on trade and UK politics to also provide direction throughout the day.

Corporate earnings will also be in focus on the day. Credit Agricole earnings results will likely garner plenty of attention.

In the futures market, at the time of writing, the DAX30 was down by 17.5 points, with the Dow down by 32 points.

European Equities: Earnings, Economic Data and Trade News in Focus

Economic Calendar:

Thursday, 7th November

  • German Industrial Production (MoM) (Sep)
  • ECB Economic Bulletin  

Friday, 8th November

  • German Trade Balance (Sep)
  • French Non-Farm Payrolls (QoQ) (Q3)

The Majors

It was a 4th consecutive day in the green for the European majors on Wednesday, with the CAC40 rising by 0.34% to lead the way. The EuroStoxx600 and DAX30 weren’t far behind, with gains of 0.21% and 0.24% respectively.

In a choppy session that saw the majors in the red early in the day, economic data from the Eurozone provided much-needed support.

On the geopolitical front, news of China pushing for the U.S Administration to remove September tariffs as part of the Phase 1 deal raised concerns over whether a Phase 1 agreement would materialize.

Earnings were also in focus on the day, with a number of European heavyweights delivering results.

The Stats

It was a busy day on the Eurozone economic calendar on Wednesday. Key stats from the Eurozone included German factory orders, Spanish and Italian service PMIs and the Eurozone’s September retail sales figures.

France, Germany, and the Eurozone’s finalized service sector and composite PMI were also of influence.

Factory Orders

From Germany, factory orders rose by 1.3% in September, reversing a 0.6% fall in August. Economists had forecast a 0.1% rise.

According to Destatis,

  • Domestic orders increased by 1.6%, with foreign orders rising by 1.1%, month-on-month.
  • New orders from the Eurozone slid by 1.8%, while new orders from other countries jumped by 3.0%.
  • Manufacturers of intermediate goods saw new orders decrease by 1.5%, while manufacturers of capital goods saw new orders rise by 3.1%.
  • New orders for consumer goods increased by 0.8%, month-on-month.
  • While new orders rose by 1.3% in September, month-on-month, new orders were down by 5.4% on the same month a year earlier.

The PMI numbers

Spain’s service PMI fell from 53.3 to 52.7 in October. Economists had forecast a fall to 52.8.

Italy’s service PMI rose from 51.4 to 52.2 in October, coming in ahead of a forecasted decline to 51.0.

France’s finalized service PMI came in at 52.9, in line with prelim and up from a September 51.1

Germany’s finalized service PMI stood at 51.6, up from a prelim 51.2 and September 51.4.

With the Eurozone service PMI rising from 51.6 to 52.2, (Prelim: 51.8), the composite index came in at 50.6. This was up from a prelim 50.2 and September 50.1.

According to the Eurozone’s Composite PMI Survey,

  • While the composite was up in October, the PMI continued to signal a rate of growth that was amongst the weakest seen in the past six-and-a-half years.
  • The divergence between the manufacturing and service sectors remained in October.
  • While manufacturing firms recorded a 9th consecutive month of decline in production, service sector activity picked up in the month.
  • In October, Germany was the only member state to see the private sector contract.
  • Italy, Ireland, and Spain recorded marginal private-sector output when compared with September.
  • With Ireland, growth was the softest in the current 89-month sequence, while Spain registered the weakest rise in activity for nearly 6-years.
  • France outperformed in October, with the manufacturing sector returning to expansion and service sector activity picking up.

For the Eurozone

  • New work declined for a 2nd consecutive month in October, with the manufacturing sector recording another sizeable fall in new orders. There was also a sharp decline in foreign demand.
  • Overall, exports fell for a 13th successive month, with the decline amongst the sharpest in the series history.
  • Backlogs declined for an 8th consecutive month as new work declined further.
  • Employment increased, though the rate of increase was the weakest in over 4-years.
  • Input prices rose but remained close to September’s 37-month low.
  • Output prices rose at a subdued pace, as the economic environment pressured pricing power.
  • Business optimism also remained subdued as political and economic uncertainties weighed on sentiment.

Retail Sales

Later in the day, retail sales rose by 0.1% in September, following a revised 0.6% rise in August. Economists had forecast a 0.1% rise.

According to Eurostat,

  • Month-on-month, automotive fuel sales rose by 0.4%, with non-food product sales rising by 0.1%.
  • Pinning back total retail sales, however, was a 0.4% fall in the sale of food, drinks, and tobacco.
  • Ireland reported the largest increase in sales, with a 2.4% rise. Portugal (-2.4%), Latvia (-1.0%) and Slovenia (-0.7%) reported the largest declines in sales.
  • Year-on-year, retail sales rose 3.1%. Sales of non-food products rose by 4.6%. Sales of automotive fuel and sales of food, drinks, and tobacco rose by 1.6% and by 1.3% respectively.
  • Ireland recorded the highest increase in sales, up by 5.2%. Slovakia (-2.7%) and Latvia (-0.4%) saw the largest declines in sales.

The stats provided much-needed support through the early part of the session, with the DAX30 recovering from early losses.

The Market Movers

For the DAX: It was a mixed day for the auto sector, as the markets responded to earnings results and trade news. Volkswagen found strong support, rising by 1.05% to lead the way. BMW and Continental also ended the day in positive territory with gains of 0.66% and 0.19% respectively. Daimler bucked the trend, falling by 0.78%.

Banks were mixed on the day. Commerzbank rose by 0.05%, while Deutsche Bank slipped by 0.16%.

Adidas and BMW delivered earnings results on the day. While Adidas failed to impress, leading to a 4.33% slide, BMW reported a 33% increase in 3rd quarter operating profit, supporting upside on the day. A weak forecast for full-year pre-tax profit limited gains, however.

From the CAC, bank stocks also found support. Soc Gen and BNP Paribas led the way, rising by 3.41% and by 1.57% respectively, with Credit Agricole up by 0.79%.

It was bearish for the autos, however. Peugeot and Renault fell by 1.68% and by 1.59% respectively.

Soc gen delivered earnings results that were slightly below expectations. The bank’s solid ratios, however, delivered upside on the day, with the bank in a strong position to weather economic storms.

On the VIX Index

The VIX Index resumed its downward trend on Wednesday, falling by 3.66%. Reversing a 2.10% rise from Tuesday, the VIX ended the day at 12.6

A choppy session for the U.S majors saw the Dow and S&P500 see red before a late recovery. Concerns over Phase 1 of a U.S – China agreement tested the majors through the session.

The late recovery led to a late VIX slide into the red.

VIX 07/11/19 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. Key stats due out of the Eurozone include German industrial production figures for September.

From the ECB, the Economic Bulletin is also due out later in the day.

On the geopolitical risk front, we can expect any chatter on trade and UK politics to also provide direction throughout the day.

Corporate earnings will also be in focus on the day, with Commerzbank due to release quarterly earnings today.

In the futures market, at the time of writing, the DAX30 was up by 7 points, while the Dow down by 3 points.

European Equities: Economic Data Will Need to Impress…

Economic Calendar:

Wednesday, 6th November

  • German Factory Orders (MoM) (Sep)
  • Spanish Services PMI (Oct)
  • Italian Services PMI (Oct)
  • French Services PMI (Oct) Final
  • German Services PMI (Oct) Final
  • Eurozone Markit Composite PMI (Oct) Final
  • Eurozone Services PMI (Oct) Final
  • Eurozone Retail Sales (MoM) (Sep)

Thursday, 7th November

  • German Industrial Production (MoM) (Sep)
  • ECB Economic Bulletin  

Friday, 8th November

  • German Trade Balance (Sep)
  • French Non-Farm Payrolls (QoQ) (Q3)

The Majors

It was another day in the green for the European majors on Tuesday, with the CAC40 up by 0.39% to lead the way. The EuroStoxx600 and DAX30 saw more modest gains of 0.20% and 0.09% respectively.

With no economic data out of the Eurozone to provide direction, positive sentiment towards the U.S – China trade talks continued to provide support.

The Stats

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

A lack of stats left the European majors in the hands of corporate earnings, economic data out of the U.S and geopolitical risk on the day.

Economic data from the U.S included finalized October service and Composite PMIs, September JOLTs job openings and the market’s preferred ISM Non-Manufacturing PMI for October.

The market’s preferred ISM numbers showed that service sector activity picked up in October. The ISM non-manufacturing PMI rose from 52.6 to 54.7, which was market positive. The rise in October was in contrast to the less influential Markit survey figures that showed service sector activity grow at a slower pace. The Markit Service PMI fell from 50.9 to 50.6 in October.

A fall in JOLTs job openings in September and a narrowing in the U.S trade deficit had a muted impact on the European majors.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Tuesday. Continental and BMW led the way, with gains of 2.05% and 1.96% respectively. Daimler also saw green, rising by 0.44%, whilst Volkswagen bucked the trend, falling by 0.19% on the day.

Banks also found support on Tuesday. Commerzbank rose by 1.23%, with Deutsche Bank up by 0.09%.

From the CAC, bank stocks also found support. Soc Gen and BNP Paribas led the way, rising by 1.52 % and by 1.34% respectively, with Credit Agricole up by 0.63%.

It was mixed for autos, however. Peugeot rose by 1.08%, while Renault fell by 0.47% on the day.

On the VIX Index

The VIX Index saw green for a second consecutive day on Tuesday, rising by 2.10%. Following on from a 4.31% gain on Monday, the VIX ended the day at 13.1.

The upside for the VIX came in spite of positively skewed data from the U.S and ongoing hopes of a partial end to the U.S – China trade war.

VIX 06/11/19 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. Key stats due out of the Eurozone include German factory orders for September, October Service Sector PMIs out of Spain and Italy and Eurozone retail sales figures for September. The Eurozone’s finalized service and composite will also provide direction.

Barring material deviation from prelims, finalized French and German service sector PMIs will unlikely to have an influence on the day.

Corporate earnings and geopolitical risk will continue to provide direction throughout the day.

From the U.S, 3rd quarter unit labor costs and nonfarm productivity numbers will likely have a muted impact on the majors.

In the futures market, at the time of writing, the DAX30 was down by 31.5 points, with the Dow down by 29 points.

European Equities: Can Trade Optimism Deliver More Highs?

Economic Calendar:

Wednesday, 6th November

  • German Factory Orders (MoM) (Sep)
  • Spanish Services PMI (Oct)
  • Italian Services PMI (Oct)
  • French Services PMI (Oct) Final
  • German Services PMI (Oct) Final
  • Eurozone Markit Composite PMI (Oct) Final
  • Eurozone Services PMI (Oct) Final
  • Eurozone Retail Sales (MoM) (Sep)

Thursday, 7th November

  • German Industrial Production (MoM) (Sep)
  • ECB Economic Bulletin  

Friday, 8th November

  • German Trade Balance (Sep)
  • French Non-Farm Payrolls (QoQ) (Q3)

The Majors

It was a particularly bullish start to the week for the European majors, with the DAX30 rallying by 1.35% to lead the way. The EuroStoxx600 and CAC30 weren’t far behind, with gains of 1.00% and 1.08% respectively.

Comments from the U.S administration on Sunday drove the European majors northwards on Monday.

While the U.S administration stated that they will be looking for a new venue to sign the phase 1 agreement, it was the plan to grant licenses to permit U.S firms to sell to Huawei Technologies that was the key.

With geopolitical risk abating at the start of the week and economic data delivering few shocks, there was little to spook the majors on the day.

The Stats

It was a busy day on the Eurozone economic calendar on Monday. October Manufacturing PMI numbers out of Spain and Italy provided direction going into the European session.

Finalized October Manufacturing PMIs out of France, Germany and the Eurozone also influenced later in the day.

On the PMI numbers

Spain’s Manufacturing PMI fell from 47.7 to 46.8 in October. Economists had forecast a rise to 48.2.

Italy’s Manufacturing PMI fell from 47.8 to 47.7 in October, coming in ahead of a forecasted decline to 47.6.

France’s finalized Manufacturing PMI came in at 50.7, up from a prelim 50.5 and September 50.1

Germany’s finalized Manufacturing PMI stood at 42.1, up from a prelim 41.9 and September 41.7.

The Eurozone Manufacturing PMI was revised from a prelim 45.7 to 45.9. In September, the PMI had stood at 45.7.

According to the Eurozone’s October Markit Survey,

  • The Final survey revealed that there was sustained weakness in output, new orders, and purchasing.
  • Also of concern was an acceleration in job shedding to the fastest rate since the beginning of 2013.
  • Perhaps of greater concern was a sharp slide in new order volumes.
  • Weakness in demand was reported across domestic and international markets.
  • On the international front, Austria and Germany reported sizeable declines in new export orders.
  • Germany remained the main drag on the manufacturing sector in the region, with Austria also seeing a sharp deterioration in October.
  • Thrown into the mix was Spain’s manufacturing sector, with the PMI falling to a six-and-a-half-year low.

By ranking, Greece came in at the top of the table, in spite of the PMI falling to a 4-month low 53.5.

France (50.7), Ireland (50.7), and the Netherlands (50.3) barely budged in October.

Italy (47.7), Spain (46.8), Austria (45.5), and Germany (42.1) all contracted, with Germany sitting at the bottom of the table.

From the U.S, factory orders failed to impact despite a 0.6% slide in September, which was worse than a forecasted decline of 0.5%. Orders had fallen by 0.1% in August.

The Market Movers

For the DAX: It was a mixed day for the auto sector, in spite of the positive sentiment towards trade. Continental led the way, rallying by 3.84%. Volkswagen and BMW and also made solid gains, rising by 2.93% and by 2.71% respectively. Daimler bucked the trend on the day, falling by 0.3%.

Banks found strong support at the start of the week. Commerzbank rallied by 4.61%, with Deutsche Bank up by 4.23%.

From the CAC, bank stocks also found support. Soc Gen and BNP Paribas led the way, rising by 2.73 % and by 2.71% respectively, with Credit Agricole up by 1.87%.

It was also bullish for the autos. Peugeot rallied by 3.38%, while Renault rose by a modest 0.81% on the day.

On the VIX Index

The VIX Index saw green at the start of the week, rising by 4.31%. Partially reversing a 6.96% fall from Friday, the VIX ended the day at 12.8

The upside for the VIX came in spite of the U.S majors hitting fresh highs on Monday.

VIX 05/11/19 Daily Chart

The Day Ahead

It’s a quiet day ahead on the Eurozone economic calendar. There are no material stats due out of the Eurozone to provide direction on the day.

A lack of stats leaves the majors in the hands of economic data out of the U.S, corporate earnings and geopolitics.

Economic data from the U.S included September trade data, JOLTs job openings and finalized October service sector PMIs.

Of greater influence, however, will be the market’s preferred ISM Non-Manufacturing PMI. Forecasts are market risk positive.

Through the early part of the day, any further chatter on trade will also provide direction.

In the futures market, at the time of writing, the DAX30 was up by 9.5 points, with the Dow up by 44 points.

European Equities: Trade Optimism Supports ahead of October PMI Numbers

Economic Calendar:

Monday, 4th November

  • Spanish Manufacturing PMI (Oct)
  • Italian Manufacturing PMI (Oct)
  • French Manufacturing PMI (Oct) Final
  • German Manufacturing PMI (Oct) Final
  • Eurozone Manufacturing PMI (Oct) Final

Wednesday, 6th November

  • German Factory Orders (MoM) (Sep)
  • Spanish Services PMI (Oct)
  • Italian Services PMI (Oct)
  • French Services PMI (Oct) Final
  • German Services PMI (Oct) Final
  • Eurozone Markit Composite PMI (Oct) Final
  • Eurozone Services PMI (Oct) Final
  • Eurozone Retail Sales (MoM) (Sep)

Thursday, 7th November

  • German Industrial Production (MoM) (Sep)
  • ECB Economic Bulletin  

Friday, 8th November

  • German Trade Balance (Sep)
  • French Non-Farm Payrolls (QoQ) (Q3)

The Majors

It was a bullish end to the week for the European majors, with the DAX30 rising by 0.73% to lead the way on the day. The EuroStoxx600 and CAC30 weren’t far behind, with gains of 0.68% and 0.56% respectively.

Gains on the day came in spite of negative chatter on trade, with economic data out of China and the U.S providing support.

On the geopolitical front, news late in the week of China and the U.S having doubts over a longer-term trade agreement had tested risk sentiment going into Friday’s session.

The Stats

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

The lack of stats left the majors in the hands of economic data from China and the U.S.

Ahead of the European open, China’s Caixin Manufacturing PMI rose from 51.4 to 51.7 in October, supporting risk appetite. Economists had forecast a fall to 51.0.

Later in the day, economic data out of the U.S also delivered support to the European majors.

Nonfarm payrolls increased by 129k in October, coming in well above a forecast of 89k. While average earnings rose by just 0.2%, month-on-month, short of a forecasted 0.3% rise, year-on-year average earnings rose by 3%.

The numbers were good enough to support risk, offsetting the negative stats on the day, which included disappointing manufacturing PMIs and a rise in the U.S unemployment rate.

While the Manufacturing PMI rose from 47.8 to 48.3, economists had forecasted rise to 48.9. On the unemployment front, a rise from 3.5% to 3.6% was expected, which limited any negative reaction to the rise.

The Market Movers

For the DAX: It was a bullish day for the auto sector, as the markets brushed off the negative sentiment towards trade. Continental led the way, rallying by 2.24%. BMW and Volkswagen also made solid gains, rising by 1.02% and by 0.85% respectively. Daimler trailed the pack with a more modest 0.5% gain on the day.

Banks found strong support at the end of the week. Commerzbank rose by 1.49%, with Deutsche Bank rising by 1.93%.

From the CAC, bank stocks also found support. Soc Gen and BNP Paribas led the way, rising by 1.61 % and by 0.77% respectively, with Credit Agricole up by 0.73%.

It was also bullish for the autos. Peugeot rallied by 2.91%, with Renault rising by 2,11% on the day.

On the VIX Index

The VIX Index hit red at the end of the week, falling by 6.96%. Reversing a 7.22% rise from Thursday, the VIX ended the day at 12.3

Economic data out of China and the U.S left the VIX in the red on the day, as the markets looked beyond the U.S – China trade war.

Negative sentiment towards trade had provided the VIX with the prospect of a weekly rise on Thursday.

VIX 04/11/19 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. October Manufacturing PMIs are due out of Spain and Italy, ahead of finalized numbers for France, Germany, and the Eurozone.

Barring any deviation from prelims, Italy and the Eurozone’s finalized PMIs will likely have the greatest influence on the majors.

Expect the DAX30 to be more sensitive to any revised figures out of Germany, however.

From the U.S, September factory orders will also provide direction later in the day.

On the geopolitical front, chatter on trade and political news from the UK will also have influence. Positive comments from the U.S administration over the weekend supported risk appetite early in the day.

In the futures market, at the time of writing, the DAX30 was up by 33.5 points, with the Dow up by 34 points.

European Equities: A Week in Review – 01/11/19

The Majors

It was another positive week for the European majors, with the CAC40 up by 0.69% to lead the way. The DAX30 and Eurostoxx600 saw more modest gains of 0.52% and 0.36% respectively.

For the DAX30 and EuroStoxx600, 0.73% and 0.68% gains respectively on Friday delivered the upside for the week. For the CAC40, a 0.56% rise added to the upside from earlier in the week.

Corporate earnings, economic data, and monetary policy were all in focus in the week, as was chatter from the U.S and China on trade.

On the trade front, news of China having doubts over the possibility of a long-term trade agreement with the U.S weighed mid-week.

Corporate earnings also pressured the DAX, with Deutsche Bank seeing particularly heavy losses following Wednesday’s 3rd quarter earnings release.

It was the stats that ultimately provided the upside for the majors in the week.

The Stats

It was a busy week on the Eurozone economic calendar.

The markets had to wait until Wednesday, however, to digest any material data.

For the DAX30, disappointing unemployment figures for October and weaker than anticipated September retail sales figures weighed.

While the unemployment rate held steady at 5%, a larger than expected 6k rise in unemployment was negative on Wednesday. A 0.1% rise in retail sales fell short of a forecasted 0.3% rise, also weighing.

On Friday, manufacturing PMI numbers out of China provided the upside, however. In October, the PMI rose from 51.4 to 51.7, coming in ahead of a forecasted 51.0.

For the CAC40, stats were mixed, with better than expected 3rd quarter GDP numbers offsetting disappointing September consumer spending figures.

The economy grew by 0.3% in the 3rd quarter, quarter-on-quarter, which was at the same pace as in the 2nd quarter. Economists had forecast a GDP of 0.2%.

Consumer spending fell by 0.4%, following a 0.1% rise in August, however. Economists had forecast a 0.1% rise.

From the Eurozone, 3rd quarter GDP numbers were skewed to the positive. While the GDP eased from 1.2% to 1.1% year-on-year, the GDP rose by 0.2% quarter-on-quarter, which was at the same pace as the 2nd quarter. Economists had forecast a GDP of 0.1%.

For the broader market, Eurozone unemployment and inflation figures had a muted impact on Thursday, with negative sentiment towards trade muting the impact of economic data on the day.

From the U.S, nonfarm payrolls provided further support to the European majors on Friday.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Continental bucked the trend, sliding by 1.46% in the week. The losses came in spite of a 2.24% rally on Friday. BMW led the way for the week, rising by 1.02%, the upside coming off the back of a 1.02% gain on Friday.

Volkswagen and Daimler saw more modest gains of 0.28% and 0.11% respectively. Volkswagen rose by 0.85% on Friday, with Daimler up by 0.50% to reverse losses from earlier in the week.

It was a bearish week for the banking sector. Deutsche Bank slid by 7.55%, with Commerzbank down by 0.37%.

From the CAC, the banks also struggled. Credit Agricole led the way, sliding by 1.75%. PNP Paribas and Soc Gen weren’t far behind with losses of 1.09% and 1.34% respectively.

The French autos sector also saw red. Peugeot and Renault’s slid by 5.96% and by 4.70% respectively.

In the week, merger talks between Fiat Chrysler and PSA Peugeot Citroen ultimately weighed on Peugeot, with Fiat Chrysler finding upside from the prospect of a merger.

On the VIX Index

The VIX Index fell by 2.77% in the week ending 1st November. Following on from an 11.23% slide from the previous week, the VIX ended the week at 12.3.

Upward momentum through the first half of the week saw the VIX hit a week high 14.0 on Thursday before sliding back to sub-13 levels.

Better than expected data out of China and the U.S on Friday ultimately led to a 5th consecutive week in the red for the VIX.

VIX 02/11/19 Weekly Chart

The Week Ahead

It’s a relatively busy week on the Eurozone economic calendar. October’s finalized manufacturing and service sector PMIs are due out on Monday and Wednesday. Barring dire numbers out of Italy and Spain, the Eurozone’s composite will likely have the greatest impact.

September factor order numbers out of Germany on Wednesday and German industrial production and Eurozone retail sales figures on Thursday will also provide direction.

On Friday, expect Germany’s trade data for September to also influence.

Outside of the stats, the Eurozone’s economic bulletin, due out on Thursday, will also need considering.

From elsewhere, U.S factory orders on Monday and the U.S ISM Non-Manufacturing PMI on Tuesday will also provide direction.

On the geopolitical front, chatter from Beijing and the U.S on trade requires monitoring as will the latest polls in the UK.

There are also corporate earnings to track throughout the week.

It could be a bearish week ahead should the U.S and China fail to make progress on trade…

European Equities: U.S Stats, Trade and Corporate Earnings in Focus

The Majors

It was a day in the red for the majors on Thursday. The CAC40 led way down, falling by 0.62% to end the month up by just 0.92%. Things were not much better for the EuroStoxx600, which fell by 0.49% to also end the month up by 0.92%. The DAX30 fared somewhat better, falling by 0.34% to end the month of October up by 3.53%.

Geopolitical risk pressured the majors on Draghi’s final day at the ECB. News of China having doubts over the possibility of a longer-term trade agreement with the U.S did the damage on Thursday.

The negative sentiment impacted in spite of U.S President Trump continuing to deliver positive signals over phase 1 of an agreement.

There was no Brexit chatter to impact as Boris Johnson and the main contenders entered their first day of campaigning.

The Stats

It was a busy day on the Eurozone economic calendar on Thursday. Key stats German retail sales figures and the Eurozone’s 3rd quarter GDP and prelim October inflation figures. There was also the Eurozone’s unemployment rate to consider.

Prelim October inflation figures out of France and Italy and Spanish GDP numbers had a muted impact on the day.

From Germany, retail sales rose by just 0.1% in September, month-on-month, following a 0.1% decline in August. Economists had forecast a 0.3% rise. According to Destatis, retail sales increased by 3.4% in the same month a year earlier.

Out of the Eurozone,

The economy grew by 0.2% in the 3rd quarter, quarter-on-quarter, which was at the same pace as in the 2nd quarter. Economists had forecast 0.1% growth. According to Eurostat,

  • Year-on-year, the GDP rose by 1.1%, which was in line with forecasts, whilst easing from 1.2% in the 2nd

The Eurozone’s unemployment rate held steady at 7.5% in September, while down from 8.0% in September 2018. This was the lowest rate recorded in the Eurozone since July 2008.

According to Eurostat,

  • Germany had the lowest unemployment rate at 3.1%, while Greece (16.9% in July) and Spain (14.2%) had the highest unemployment rates.
  • Year-on-year Greece saw the largest fall in unemployment, with the unemployment rate falling from 19.1% to 16.9%.
  • Cyprus (from 8.0% to 6.6%) and Estonia (from 5.3% to 3.9%) also saw sizeable declines in unemployment.
  • Lithuania was the only member state to report an increase, rising from 6.3% to 6.5%.

Prelim October inflation figures were mixed, however.

According to Eurostat,

  • The Eurozone’s annual rate of inflation eased from 0.8% to 0.7% in October. By contrast, the annual core rate of inflation picked up from 1.0% to 1.1%.
  • Support came from services, with the annual rate of inflation estimated to rise from 1.5% to 1.6%.
  • Alcohol & tobacco (1.6% unchanged) and non-energy industrial goods (up from 0.2% to 0.3%) also provided support.
  • A more marked fall in energy prices, -3.2% compared with -1.8% in September, weighed on the headline number.

Later in the day, economic data out of the U.S had a more muted impact as the markets responded to chatter on trade.

The Market Movers

For the DAX: It was a bearish day for the auto sector, as negative sentiment towards trade weighed. Volkswagen led the way, falling by 2.14%. Continental and Daimler weren’t far behind, with losses of 1.50% and 1.30% respectively. BMW saw a more modest loss of 1.07%.

Things were not much better for the banks, with Commerzbank falling by 1.11% and Deutsche Bank falling by a further 2.36%. On Wednesday, disappointing earnings results had left Deutsche Bank with a 7.43% loss.

From the CAC, it was yet another day in the red for the banks. Soc Gen and BNP Paribas fell by 0.90% and by 0.26% respectively, with Credit Agricole down by 0.09%.

BNP Paribas saw red in spite of better than forecasted corporate earnings results.

It was also bearish for the autos. Peugeot reversed Wednesday’s 4.53% gain with a 12.86% tumble, while Renault slid by 3.49% on the day.

Fiat Chrysler got the support of the market as merger talks between Fiat Chrysler and PSA Peugeot Citroen got underway. Fiat Chrysler shares rose by 8.22% in Europe and by 2.27% on the NYSE.

On the VIX Index

The VIX Index returned to positive territory on Thursday, rising by 7.22%. Reversing a 6.59% decline from Wednesday, the VIX ended the day at 13.2.

Negative sentiment towards trade provided the support on the day, as the U.S major indexes closed out the day in the red.

VIX 01/11/19 Daily Chart

The Day Ahead

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

A lack of stats puts economic data out of the U.S in focus, with October nonfarm payrolls and wage growth due out later today.

We can expect October ISM manufacturing PMI numbers to also influence on the day.

On the geopolitical risk front, the markets will also be influenced by any chatter on trade, which would overshadow any positive corporate earnings results.

Earlier in the day, China’s all influential Caixin Manufacturing PMI rose from 51.4 to 51.7 in October to provide some early support.

In the futures market, at the time of writing, the DAX30 was up by 41 points, with the Dow up by 56 points.

European Equities: Corporate Earnings and Stats to Test on Draghi’s Last Day

Economic Calendar:

Thursday, 31st October

  • German Retail Sales (MoM) (Sep)
  • Spanish GDP (QoQ) (Q3)
  • Italian CPI (MoM) (Oct)
  • Eurozone CPI (YoY) (Oct) Prelim
  • Eurozone Unemployment Rate (Sep)

The Majors

It was another mixed day for the European majors on Wednesday. The DAX30 saw red for a 2nd consecutive day, falling by 0.23%, while the CAC40 and EuroStoxx600 rose by 0.45% and 0.08% respectively.

Negative news on the trade front pressured the majors as the markets awaited the FED’s interest rate decision due after the close.

According to reports, U.S President Trump has demanded that China buy $50bn worth of U.S agri as part of the phase 1 agreement. There has been some reluctance to commit to the demand, which may delay any signing until next month.

Corporate earnings were also in focus on the day, with Deutsche Bank pulling the DAX30 into the red, after reporting a net loss in the quarter.

The Stats

It was a busy day on the Eurozone economic calendar on Wednesday. Key stats included 3rd quarter GDP and September consumer spending figures out of France. Later in the morning, Germany’s October unemployment figures also influenced.

Of less impact on the day were Spain and Germany’s prelim October inflation figures.

According to Insee,

The French economy grew by 0.3% in the 3rd quarter, quarter-on-quarter, which was better than a forecast of 0.2%. In the 2nd quarter, the economy had also grown by 0.3%.

  • Household consumption expenditures picked up from 0.2% to 0.3% providing support.
  • Total GFCF, however, slipped from a 1.2% increase in the 2nd quarter to a 0.9% increase in the 3rd
  • Final domestic demand, excl. inventory changes grew at the same pace as in the 2nd quarter and contributed 0.5 points to GDP growth.
  • Imports jumped by 1.4%, following a 0.3% decline in the 2nd quarter, while exports rose by 0.3%, reversing a 0.1% decline.
  • There was also a positive contribution from inventories that contributed 0.1 points in the quarter.

French consumer spending fell by 0.2% in September, following a stall in August. Economists had forecast a 0.1% decline.

According to Insee,

  • While consumer spending slipped in September, consumption rose by 0.4% in the 3rd
  • A slide on spending on manufacturing goods (-1.3%) weighed in September, with spending on energy (-0.1%) also weighing.
  • There was a jump in spending on food, however, which rose by 0.5% to provide support.

From Germany, while the unemployment rate held steady at 5.0% in October, the number of unemployment increased by 6k, according to Destatis, following a 10k fall in September. Economists had forecast a 5k rise.

Later in the day, economic data out of the U.S also influenced.

According to the latest ADP figures, nonfarm employment rose by 125K in October, coming in ahead of a 120k rise. In September nonfarm employment had risen by a revised 93k.

On the U.S economic front, the markets couldn’t have asked for more ahead of an anticipated rate cut later in the day.

The U.S economy grew by 1.9% in the 3rd quarter, quarter-on-quarter, coming in ahead of a forecasted 1.6%. In the 2nd quarter, the economy had grown by 2%, quarter-on-quarter.

The Market Movers

For the DAX: It was another mixed day for the auto sector. Volkswagen bucked the trend on the day, rising by 0.56%. It was bearish for the rest, with Continental sliding by 3.83% to lead the way. BMW and Daimler saw more modest losses of 0.30% and 0.73% respectively.

It was a bearish day for the banks, however, with Commerzbank falling by 3.42% and Deutsche Bank tumbling by 7.43%.

The slide in Deutsche Bank came off the back of its 3rd quarter earnings release on Wednesday. A 3rd quarter loss of €832m, attributed to restructuring costs and a fall in fixed-income trading revenue did the damage.

It was a different story for Volkswagen, however, which beat earnings estimates to support the upside on the day. The upside came in spite of lowering its outlook on deliveries due to a slowdown in the sector globally.

From the CAC, it was another day in the red for the banks. Soc Gen and BNP Paribas slid by 2.47% and by 2.23% respectively, with Credit Agricole down by 2.13%.

It was a mixed day for the autos, however. Peugeot rallied by 4.53%, while Renault slid by 4.02% on the day.

The upside for Peugeot came off the back of M&A chatter with Fiat Chrysler. L’Oreal was the best performer on the day, however, rallying by 7.56% in response to solid 3rd quarter earnings numbers.

On the VIX Index

The VIX Index saw red for the first day in three, falling by 6.59% on Wednesday. Reversing a 0.69% gain from Tuesday, the VIX ended the day at 12.3.

A late in the day reversal left the VIX in the red, as the markets responded to the FED rate cut, which had been anticipated.

VIX 31/10/19 Daily Chart

The Day Ahead

It’s another busy day ahead on the Eurozone economic calendar. Key stats due out of the Eurozone include the Eurozone’s 1st estimate GDP numbers for the 3rd quarter and September retail sales figures out of Germany.

The Eurozone’s September unemployment rate and prelim October inflation figures will also be in focus.

Prelim October inflation figures out of France and Italy and 3rd quarter GDP numbers out of Spain will likely have less influence on the day.

From the U.S, it’s also a busy day on the economic calendar, with September Core PCE Price Index and personal spending figures due out.

There are also corporate earnings to consider along with any further updates from Beijing and Washington on phase 1 of the trade agreement.

Ahead of the European session, October private sector PMI numbers from China failed to weigh in spite of the manufacturing sector contracting for a 6 consecutive month.

In the futures market, at the time of writing, the DAX30 was up by 18.5 points, with the Dow up by 9 points.

European Equities: Economic Data and Corporate Earnings to Test the Majors

Economic Calendar:

Wednesday, 30th October

  • French GDP (QoQ) (Q3)
  • French Consumer Spending (MoM) (Sep)
  • Spanish HICP (YoY) (Oct)
  • German Unemployment Change & Unemployment Rate (Oct)
  • German CPI (MoM) (Oct)

Thursday, 31st October

  • German Retail Sales (MoM) (Sep)
  • Spanish GDP (QoQ) (Q3)
  • Italian CPI (MoM) (Oct)
  • Eurozone CPI (YoY) (Oct) Prelim
  • Eurozone Unemployment Rate (Sep)

The Majors

A run of 6 consecutive days in the green came to an end for the DAX30 and EuroStoxx600 on Tuesday.

The DAX30 and EuroStoxx600 fell by 0.02% and 0.16% respectively, while the CAC40 managed to eke out a 0.17% gain.

A lack of economic data from the Eurozone left the markets to focus on corporate earnings and geopolitical risk on the day.

On the corporate earnings front, a mixed bag on the day left the majors relatively flat ahead of the FOMC interest rate decision later today.

Geopolitics also tested the majors on the day, with the UK seemingly on the way to a December general election that brings plenty of uncertainty. On the trade front, news of the U.S looking into whether to further delay the rollout of tariffs on more Chinese goods was also a test.

While progress has been made towards phase 1 of an agreement, the issue of tariffs and impact on the economy remains.

The Stats

It was another quiet day on the Eurozone economic calendar on Tuesday. There were no material stats from the Eurozone to provide the EUR with direction on the day.

From the U.S, October’s CB Consumer Confidence figures provided direction later in the day. According to the latest Survey,

  • The Index slipped marginally from a revised 126.3 to 125.9 in October. Economists had forecast a rise to 128.0.
  • Pressure came from the Expectations Index, which fell from 96.8 to 94.9, while the Present Situation Index provided support. The Present Situation Index rose from 170.6 to 172.3 in October.
  • While concerns over business conditions and job prospects weighed on the Expectations Index, confidence remained high, supportive of consumer spending.

The Market Movers

For the DAX: It was a mixed day for the auto sector. Daimler bucked the trend on the day, rising by 0.07%. It was bearish for the rest, with Volkswagen falling by 1.01% to lead the way down. Continental and BMW saw more modest losses of 0.64% and 0.31% respectively.

It was also a mixed day for the banks, with Commerzbank rising by 0.41%, whilst Deutsche Bank fell by 0.71%.

From the CAC, it was a day in the red for the banks. BNP Paribas fell by 0.06%, with Credit Agricole and Soc Gen declining by 0.46% and by 0.08% respectively. For the autos, Peugeot rose by 0.24%, while Renault slid by 0.57% on the day.

On the VIX Index

The VIX Index saw green for a 2nd consecutive day, rising by 0.69% on Tuesday. Following on from a 3.64% gain on Monday, the VIX ended the day at 13.2.

It was a relatively non-eventful day, with mixed corporate earnings and softer consumer confidence figures out of the U.S providing support. The prospect of a UK general election that will likely decide the fate of Britain also supported the VIX on the day.

VIX 30/10/19 Daily Chart

The Day Ahead

After a quiet start to the week, it’s a busy day ahead on the Eurozone economic calendar. Key stats due out of the Eurozone include French 3rd quarter GDP and September consumer spending figures in the early part of the session.

Out of France, economic growth is expected to slow to 0.2%, quarter-on-quarter, in the 3rd quarter. Anything weaker would certainly catch the markets off-guard…

From Germany, October’s unemployment change figures and the unemployment rate will also influence later in the morning.

Following some concerning news over job losses in Germany of late, any jump in the unemployment rate would pressure the DAX in particularly.

We would expect Spain and Germany’s prelim October inflation figures to have a muted impact on the majors on the day.

Economic data from the U.S will also have an impact on the European majors later in the session. October ADP nonfarm employment change and 3rd quarter GDP numbers are due out ahead of the FED’s interest rate decision and rate statement.

From the corporate earnings calendar, Volkswagen is scheduled to release 3rd quarter results later this morning. Earnings from the U.S will also have an impact, with Apple Inc. and Facebook Inc. due to release earnings later in the day.

With a mass of stats for the majors to consider, geopolitics may take a back seat on the day, barring any major surprises or shocks…

On the monetary policy front, the FED is due to deliver its October interest rate decision and rate statement. While the European markets will have already closed, some caution is to be expected throughout the day.

In the futures market, at the time of writing, the DAX30 was down by 23 points, with the Dow down by 24 points.

European Equities: Corporate Earnings, Stats and the UK Parliament in Focus

Economic Calendar:

Wednesday, 30th October

  • French GDP (QoQ) (Q3)
  • French Consumer Spending (MoM) (Sep)
  • Spanish HICP (YoY) (Oct)
  • German Unemployment Change /  Rate (Oct)
  • German CPI (MoM) (Oct)

Thursday, 31st October

  • German Retail Sales (MoM) (Sep)
  • Spanish GDP (QoQ) (Q3)
  • Italian CPI (MoM) (Oct)
  • Eurozone CPI (YoY) (Oct) Prelim
  • Eurozone Unemployment Rate (Sep) 

The Majors

It was a relatively bullish start to the week for the European majors, with the DAX30 rising by 0.37% to lead the way. The EuroStoxx600 and CAC40 saw more modest gains of 0.25% and 0.15% respectively.

A lack of economic data left the majors in the hands of geopolitical risk on the day.

Comments from the U.S President on Monday of an imminent phase 1 trade deal with China provided support on the day.

There was also the EU’s decision to approve Britain’s extension request, which further reduced the prospects of a no-deal Brexit.

While geopolitics was the key driver on the day, corporate earnings results added support ahead of Wednesday’s FOMC interest rate decision. The FOMC is expected to cut rates this week, which is also market positive.

The Stats

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

From the U.S, stats were skewed to the positive providing support to the majors late on. In September, the U.S goods trade deficit narrowed from US$73.06bn to US$73.39bn, with U.S retail inventories ex-auto rising by 0.3%. In August, U.S retail investors ex-auto had fallen by 0.2%.

The Market Movers

For the DAX: It was a bullish day for the auto sector. Continental led the way, rallying by 2.38%. Volkswagen and Daimler were also amongst the top performers on Monday, rising by 2.04% and by 1.63% respectively. BMW saw a more modest gain of just 0.75%.

It was also a positive day for the banks, with Commerzbank and Deutsche Bank gaining 2.34% and 1.03% respectively.

From the CAC, it was also a day in the green for the banks. BNP Paribas rose by 0.71%, with Credit Agricole and Soc Gen gaining 0.21% and 0.55% respectively. For the autos, Peugeot rose by just 0.08%, while Renault rallied by 1.34%.

On the VIX Index

The VIX Index rose by 3.64% on Monday, ending a run of 3rd consecutive days in the red. Following a 7.73% loss on Friday, the VIX ended the day at 13.1.

Upside on the day came in spite of positive updates from the U.S President on trade and the EU’s approval of Britain’s extension request through to January 2020.

VIX 29/10/19 Daily Chart

The Day Ahead

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

Through the early part of the European session, geopolitics will be in focus.

Later in the day, economic data from the U.S will have some influence on the European majors. October consumer confidence numbers will need to impress to provide support.

On the corporate earnings front, General Motors releases its 3rd quarter corporate earnings on Tuesday. We can also expect market reaction to Alphabet Inc’s earnings release from Monday. Alphabet Inc. missed earnings estimates for the 3rd quarter, leading to an after-hours slide in the stock.

In the futures market, at the time of writing, the DAX30 was up by 2.5 points, with the Dow up by 11 points.

European Equities: Geopolitics and Corporate Earnings in Focus

Economic Calendar:

Wednesday, 30th October

  • French GDP (QoQ) (Q3)
  • French Consumer Spending (MoM) (Sep)
  • Spanish HICP (YoY) (Oct)
  • German Unemployment Change / Rate (Oct)
  • German CPI (MoM) (Oct)

Wednesday, 30th October

  • German Retail Sales (MoM) (Sep)
  • Spanish GDP (QoQ) (Q3)
  • Italian CPI (MoM) (Oct)
  • Eurozone CPI (YoY) (Oct) Prelim
  • Eurozone Unemployment Rate (Sep)

The Majors

It was a bullish end to the week for the European majors, with the CAC40 rising by 0.67% to lead the way. The EuroStoxx600 and DAX30 saw more modest gains of 0.16% and 0.17% respectively.

Economic data had a muted impact on the majors at the end of the week as the markets responded to positive updates from Washington on trade talks.

Support also came from U.S corporate earnings on the day.

The upside was limited, however, following the EU’s decision to delay the approval of Britain’s request to extend Britain’s withdrawal until 31st January 2020.

The Stats

It a busy day on the Eurozone economic calendar on Friday. Key stats from the Eurozone included prelim business and consumer sentiment figures out of Germany.

Germany’s GfK Consumer Climate Index fell from 9.8 to 9.6 in November, to its lowest level since November 2016. Economists had forecast the index to hold steady at 9.8.

According to the October GfK Report,

  • Both economic and income expectations, as well as propensity to buy hit reverse.
  • While sentiment towards the global economy, trade conflicts, and Brexit continued to weigh, increasing reports of job losses added to the dampening mood.
  • The economic expectation indicator fell by 4.8 points to -13.9, the lowest level since December 2012.
  • Income expectations saw a more marked deterioration, with the indicator falling by 7.8 points to 39, the lowest level since December 2013.
  • The propensity to buy index fell by 3.4 points to 51.7, which continued to defy the negative sentiment towards the economy and income expectations.

On the business sentiment front, the Ifo Business Climate Index held steady at 94.6, which was better than a forecasted fall to 94.5.

According to the latest Ifo report,

  • Companies’ assessment of the current situation fell from 98.5 to 97.8, while expectations improved, with the expectations sub-index rising from 90.9 to 91.5.
  • Sentiment amongst manufacturing companies improved, with the business climate index rising from -6.4 to -5.5, bringing to an end a run of 4 consecutive monthly declines.
  • Manufacturing companies were less pessimistic about the economic outlook but were less positive about the current situation.
  • Service sector sentiment held steady, with the index falling from 16.7 to 16.6, while the business climate in trade improved marginally, the index rising from -3.7 to -3.3. The upside in trade came from improved economic expectations amongst wholesale companies. Both retail and wholesale companies were less positive about the current economic situation, however.

The Market Movers

For the DAX: It was a mixed day for the auto sector. Continental led the way, rallying by 2.37%. BMW and Daimler also found support, rising by 1.25% and by 0.55% respectively. Volkswagen bucked the trend on the day, with a 1.19% loss.

It was also a mixed day for the banks, with Commerzbank falling by 0.18%, while Deutsche Bank gained 0.51%.

From the CAC, it was also a mixed day for the banks. BNP Paribas fell by 0.28%, while Credit Agricole and Soc Gen rose by 1.4% and by 0.08% respectively. For the autos, Peugeot fell by 0.80%, while Renault found much-needed support, rising by 0.15%.

On the VIX Index

The VIX Index saw red for a 3rd consecutive day on Friday, falling by 7.73%. Following a 2.14% loss on Thursday, the VIX ended the day at 12.7.

While uncertainty over Brexit provided support, the downside ultimately came from U.S corporate earnings and positive updates from the U.S and China on trade.

VIX 28/10/19 Daily Chart

The Day Ahead

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

From the U.S September’s goods trade data is unlikely to influence later in the day, leaving the majors in the hands of sentiment towards monetary policy and Brexit.

While the markets will be looking ahead to the FED’s interest rate decision on Wednesday, ECB President Draghi is scheduled to speak at the end of the session.

Following last week’s press conference, however, there’s unlikely to be too much influence.

On the geopolitical risk front, both Beijing and Washington will need to continue to deliver positive messages to support the majors.

Brexit will likely take center stage in the early part of the week, following the EU’s delaying of its Brexit extension decision until this week.

While an extension was agreed by the 27 member states, the length of the extension and structure was in debate.

On the corporate earnings front, while there are no marquee names delivering results, expect influence on the day.

In the futures market, at the time of writing, the DAX30 was up by 14 points, with the Dow up by 52 points.

European Equities: A Week in Review – 25/10/19

The Majors

It was a positive week for the European majors. The DAX30 rose by 2.07% to lead the way, with the EuroStoxx600 and CAC40 up by 1.57% and by 1.52% respectively.

Gains from the week saw the CAC40 and EuroStoxx600 move back into positive territory for the current month. The pair were up by 0.78% and by 1.24% respectively.

In spite of dire economic data out of Germany, the DAX30 led the way, up by 3.75% going into the final week.

Sensitivity towards trade ultimately provided support as the U.S and China make some progress.

For the week, the DAX30 and EuroStoxx600 saw 5 consecutive days in the green to support the gains. The CAC40 had a minor blip on Wednesday before bouncing back.

Geopolitics and corporate earnings provided the much-needed support in the week, with economic data continuing to be skewed to the negative.

The Stats

It was a relatively busy week on the Eurozone economic calendar.

The markets had to wait until Thursday, however, to digest any material data.

October’s private sector PMI numbers on Thursday failed to dim the mood across the broader markets.

Germany’s manufacturing sector continued to struggle, with the PMI rising from 41.7 to 41.9. Service sector activity also struggled, with the PMI easing from 51.4 to 51.2.

For the Eurozone, the manufacturing PMI held steady at 45.7, while the service sector PMI rose from 51.6 to 51.8. A slight uptick in the composite PMI from 50.1 to 50.2 came off the back of a pickup in private sector activity in France.

France’s manufacturing PMI rose from 50.1 to 50.5, with the service sector PMI rising from 51.1 to 52.9.

Things could have been worse and the fact that there was no further decline in the PMIs was positive on the day.

On Friday, German business and consumer confidence numbers pinned the DAX30 back at the end of the week.

The GfK Consumer Climate Index fell from 9.8 to 9.6, while the IFO Business Climate Index held steady at 94.6.

The Market Movers

From the DAX, it was yet another bullish week for the auto sector. Daimler led the way with an 8.8% gain, supported by positive earnings for the 3rd quarter. Continental found strong support on Friday to end the week up by 6.13%. BMW and Volkswagen saw more modest gains of 2.74% and 1.77% respectively. A trend-bucking 1.19% fall on Friday left Volkswagen trailing the pack.

It was also a positive week for the banking sector. Deutsche Bank gained 0.85%, with Commerzbank up by 3.02%.

While positive sentiment towards trade supported the autos, continued concerns over the economic outlook pegged back bank stocks.

From the CAC, the banks also found strong support. Credit Agricole led the way, rising by 3.77%. PNP Paribas and Soc Gen saw more modest gains of 1.49% and 0.69% respectively.

A pickup in private sector activity provided strong support for the banks in the week.

French auto sector also found support While Peugeot rallied by 4.99%, supported by positive earnings for the 3rd quarter. Renault gained just 0.97% following the previous week’s 9.06% slide. Renault’s slide had come off the back of a cut to its 2019 revenue outlook.

On the VIX Index

The VIX Index fell by 11.23% in the week ending 25th October. Following on from an 8.54% decline from the previous week, the VIX ended the week at 12.7.

3 consecutive days in the red, Wednesday through Friday, left the VIX in the red for the week.

While Brexit hit a speedbump in the early part of the week, U.S corporate earnings and positive chatter on trade supported the U.S majors.

On Friday, the S&P struck an all-time high in the session before seeing its 2nd highest historical close.

News hit the wires on Friday that the U.S and China had made progress towards phase 1 of a trade agreement. The positive updates suggested that the 15th December tariffs may be taken off the table.

Whether progress beyond the first phase is possible remains to be seen, however. China will certainly be looking for existing tariffs to be removed and for the U.S attack on China tech companies to cease.

VIX 26/10/19 Weekly Chart

The Week Ahead

It’s a relatively busy week on the Eurozone economic calendar. The markets will need to wait until Wednesday for key stats.

On Wednesday, French 3rd quarter GDP and September consumer spending figures are in focus alongside German unemployment numbers.

On Thursday, German retail sales and the Eurozone’s October inflation and September unemployment rate will also influence.

We would expect member state inflation numbers through the week and Spain’s 3rd quarter GDP numbers to have a muted impact, however.

From elsewhere, it’s a data deluge. Private sector PMIs out of China, consumer confidence, GDP, and nonfarm payroll numbers from the U.S are amongst key stats that will also have an impact.

On the geopolitical front, chatter from Beijing and the U.S on trade requires monitoring as will Brexit news.

There are also corporate earnings to track throughout the week.

From the U.S, Alphabet Inc. (Mon), General Motors (Tues), Apple Inc. (Wed), Facebook Inc. (Wed), Chevron Corp. (Fri), and Exxon Mobil Corp (Fri) are amongst major companies to release earnings in the week ahead.

Out of Europe, Volkswagen (Wed) and Deutsche Bank (Thur) will be in focus.

European Equities: Brexit, Earnings and Stats to Influence

Economic Calendar:

Friday, 25th October

  • GfK German Consumer Climate (Nov)
  • German Business Expectations / Current Assessment / Ifo Business Climate Index (Oct)

The Majors

It was a 4th consecutive day in the green for DAX30 and EuroStoxx600 on Thursday, with the CAC40 reversing a Wednesday pullback.

The EuroStoxx600 led the way, rising by 0.59%, with the DAX30 and CAC40 up by 0.58% and by 0.55% respectively.

Brexit uncertainty continued to pin the majors back as the markets awaited the EU’s decision on the Brexit extension request.

While geopolitics was negative on the day, corporate earnings provided the necessary support.

The Stats

It a particularly busy day on the Eurozone economic calendar on Thursday. Key stats from the Eurozone included prelim October Private sector PMIs for France, Germany and the Eurozone.

According to the Markit surveys,

The French Manufacturing PMI rose from 50.1 to 50.5 in October, according to the prelim survey. Economists had forecast a PMI of 50.0.

Service sector activity also picked up, with the October PMI rising from 51.1 to 52.9, coming in well above a forecast of 51.6.

The pickup in private sector activity led to a rise in the composite from 50.8 to 52.6.

From Germany, the Manufacturing PMI rose by 41.7 to 41.9 in October. Economists had forecast a rise to 42.0. The German Service PMI disappointed, however, with the PMI falling from 51.4 to 51.2.

Supported by a slower rate of decline in the manufacturing sector, the Composite PMI rose from 48.5 to 48.6.

For the Eurozone, the Manufacturing PMI held steady at 45.7, coming up short of a forecast of 46.1, while the Services PMI rose from 51.6 to 51.8. Economists had forecast a rise to 51.9.

The Eurozone Composite PMI rose from 50.1 to 50.2 in October, coming up short of a forecast of 50.3. According to the prelim PMI survey,

  • The flash Eurozone Composite PMI hit a 2-month high.
  • Manufacturing sector output took another hit in October, with service sector growth at its weakest since 2014.
  • Future expectations fell to its most pessimistic since 2013, with job growth at its lowest level since 2014.
  • New orders for both goods and services fell for a 2nd consecutive month.
  • Improved activity across the French private sector prevented a Eurozone contraction.

Outside of the stats, the ECB also delivered its October monetary policy decision. There were no surprises, however, in the wake of last month’s sizeable stimulus package.

From the U.S, Core Durable Goods Orders fell by 3% in September, reversing a 0.3% rise in August. Durable goods orders were also in decline, sliding by 1.1%. In August, durable goods orders had risen by 0.3%.

Private sector PMI activity was also in focus, with October’s prelim private sector PMIs providing direction late in the day.

The U.S Manufacturing PMI rose from 51.1 to 51.5 in October, with the more important Services PMI rising from 50.9 to 51.0.

On the corporate earnings front, Daimler announced an 8% rise in net profit in the 3rd quarter, with U.S tech stock results also supporting the European majors.

The Market Movers

For the DAX: It was another mixed day for the auto sector. Daimler led the way rallying by 3.44%, supported by its earnings results. Volkswagen, wasn’t far behind, with a gain of 1.66%, while BMW rose by just 0.44%. Continental bucked the trend on the day, with a 1.12% loss.

It wasn’t a mixed day for the banks, however, with Commerzbank and Deutsche Bank falling by 1.81% and by 0.85% respectively.

The top performer on the DAX30 was Infineon Tech., which rallied by 4% off the back of U.S tech earnings results on the day.

From the CAC, it was also a bearish day for the banks. BNP Paribas fell by 0.27%, with Credit Agricole down by 0.04%. Soc Gen led the way down, however, with a 1.15% loss. For the autos, it was a mixed day. While Peugeot rose by 0.89%, Renault fell by 0.06%.

Leading the way on the CAC40 was Atos, which rallied by 9.87%. The upside came off the back of news that the CEO is stepping down to become the next EU Commissioner.

On the VIX Index

The VIX saw a 2nd consecutive day in the red on Thursday, falling by 2.14%. Following on from a 3.11% decline on Wednesday, the VIX ended the day at 13.7.

U.S corporate earnings pinned the VIX back in the day, as tech stocks found much-needed support.

VIX 25/10/19 Daily Chart

The Day Ahead

It’s another busy day ahead on the Eurozone economic calendar. Consumer and business confidence figures are due out of Germany later this morning.

We can expect the majors to be particularly sensitive to the numbers on the day.

From the U.S, finalized October consumer sentiment figures will likely have a muted impact on the majors later in the day.

On the corporate earnings front, while there are no marquee names delivering results, expect some influence on the day.

Geopolitical risk will also influence throughout the day, with Brexit and chatter on trade needing consideration.

In the futures market, at the time of writing, the DAX30 down by 19 points, with the Dow down by 4 points.

European Equities: Brexit, Earnings, and PMIs in Focus

Economic Calendar:

Thursday, 24th October

  • French Manufacturing PMI (Oct) Prelim
  • French Services PMI (Oct) Prelim
  • German Manufacturing PMI (Oct) Prelim
  • German Services PMI (Oct) Prelim
  • Eurozone Manufacturing PMI (Oct) Prelim
  • Eurozone Markit Composite PMI (Oct) Prelim
  • Eurozone Services PMI (Oct) Prelim
  • ECB Deposit Facility Rate (Oct)
  • ECB Interest Rate Decision (Oct)

Friday, 25th October

  • GfK German Consumer Climate (Nov)
  • German Business Expectations (Oct) / Current Assessment (Oct) / Ifo Business Climate Index (Oct)

The Majors

It was a mixed day for the European majors on Wednesday. While the DAX30 and EuroStoxx600 rose by 0.34% and 0.11% respectively, the CAC40 slipped by 0.08%.

A lack of economic data from the Eurozone left the majors in the hands of geopolitics and U.S corporate earnings.

The UK Parliament’s vote to prevent Boris Johnson’s deal from being pushed through by 31st October tested the majors on the day. With a Brexit deal in limbo and the British PM looking for a general election to deliver Brexit, it was all eyes on the EU to approve the extension request.

The Stats

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

It was also a quiet day on the U.S economic calendar, leaving the majors exposed to geopolitical risk and U.S corporate earnings.

While it was a quiet day on the economic calendar, it was a busier day on the U.S corporate earnings calendar. Boeing, Caterpillar, Ford Motor, Microsoft and Tesla were scheduled to release earnings later in the day.

Disappointing results from Caterpillar and Boeing tested the majors late in the session, with Texas Instrument Inc. doing the majors few favors following a negative forecast announcement late on Tuesday.

While the numbers were negative, hopes of a resolution to the ongoing U.S – China trade war buffered the impact on the majors.

The Market Movers

For the DAX: It was a positive day for the auto sector. Daimler and Volkswagen led the way with gains of 2.03% and 1.04% respectively. BMW and Continental saw more modest gains of 0.75% and 0.08% respectively.

Bank stocks also found support, with Commerzbank and Deutsche Bank rising by 0.61% and 0.83% respectively.

From the CAC, it was a relatively non-eventful day for the banks. BNP Paribas and Soc Gen rose by 0.28% and 0.13% respectively, while Credit Agricole ended the day flat. For the autos, it was a mixed day. While Peugeot rallied by 3.24%, Renault fell by 0.04%, with pressure continuing to come from its negative forecast. For Peugeot, while there’s doom and gloom surrounding the auto sector, a strong 3rd quarter earnings delivered the upside.

On the VIX Index

The VIX Index saw red on Wednesday, falling by 3.11%. Reversing a 3.29% gain from Tuesday, the VIX ended the day at 14.0.

While uncertainty over Brexit was positive for the VIX, a rebound in the U.S majors pressured the VIX late in the day. In spite of U.S corporate earnings being mixed on the day, hopes of a resolution to the U.S – China trade war muted the effects of any negativity.

VIX 24/10/19 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. October prelim private sector PMIs are due out of France, Germany, and the Eurozone.

While Germany’s manufacturing sector PMI will continue to have the greatest impact, the Eurozone’s composite will also garner plenty of interest.

The markets will be looking for service sector activity to continue to provide support.

From the U.S, October private sector PMIs and September durable goods orders will also influence later this afternoon.

On the earnings front. Daimler, Amazon.com and Intel corporate earnings are in focus later that will influence risk sentiment.

Geopolitics will also provide direction. With the EU expected to approve Britain’s extension request on Brexit, it will boil down to whether Johnson gets his way and Britain goes to the polls. There is one small matter of the length of the Brexit extension to also consider.

In the futures market, at the time of writing, the DAX30 was up by 7.5 points, with the Dow up by 8 points.

European Equities: The Futures Say Red as Brexit Hits another Speedbump

Economic Calendar:

Thursday, 25th October

  • French Manufacturing PMI (Oct) Prelim
  • French Services PMI (Oct) Prelim
  • German Manufacturing PMI (Oct) Prelim
  • German Services PMI (Oct) Prelim
  • Eurozone Manufacturing PMI (Oct) Prelim
  • Eurozone Markit Composite PMI (Oct) Prelim
  • Eurozone Services PMI (Oct) Prelim
  • ECB Deposit Facility Rate (Oct)
  • ECB Interest Rate Decision (Oct)

Friday, 26th October

  • GfK German Consumer Climate (Nov)
  • German Business Expectations (Oct) / Current Assessment (Oct) / Ifo Business Climate Index (Oct)

The Majors

The European majors found further support on Tuesday, following Monday’s gains. Leading the way was the CAC40, which rose by 0.17%.  The DAX30 and EuroStoxx600 saw more modest gains of just 0.05% and 0.09% respectively.

Economic data was on the lighter side on Tuesday, leaving geopolitics in focus throughout the day.

From the UK Parliament, it was a mixed day, with the British PM managing to get the support for the latest Withdrawal Bill Agreement, while losing control of the Brexit schedule.

Parliament voted down Johnson’s plan to deliver Brexit by 31st October.

For the majors, the outcome was ultimately skewed to the positive, as Britain moved further away from the chance of a no-deal Brexit.

On the trade war front, positive comments from both, Beijing and Washington, provided support on the day.

The Stats

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

From the U.S, September’s existing home sales figures had a muted impact on the majors.

Existing home sales fell by 2.20% in September, reversing a 1.5% rise in August.

The Market Movers

For the DAX: It was another mixed day for the auto sector. Volkswagen bucked the trend, falling by 0.42%. Continental led the way, however, rallying by 2.83%, with BMW and Daimler rising by 0.43% and by 0.33% respectively.

It wasn’t a mixed day for the banks, however, with Commerzbank and Deutsche Bank falling by 0.79% and by 1.96% respectively.

Disappointing UBS earnings results weighed on the day.

From the CAC, it was a mixed day for the banks. BNP Paribas rose by another 0.02%, while Credit Agricole eked out a 0.25% gain. Soc Gen bucked the trend, falling by 0.34%. For the autos, it was also a mixed day. While Peugeot rose by 1.26%, Renault fell by 0.16% on the day.

On the VIX Index

The VIX Index saw green on Tuesday, rising by 3.29%. Reversing a 1.75% fall from Monday, the VIX ended the day at 14.5.

Brexit uncertainty provided the VIX with support on the day.

VIX 23/10/19 Daily Chart

The Day Ahead

It’s another quiet day ahead on the Eurozone economic calendar. There are no material stats due out of the Eurozone to provide the major with direction on the day.

The lack of stats will leave the markets to continue to respond to events in the UK parliament. While a no-deal Brexit remains unlikely, talk of a general election could test risk sentiment.

On the earnings front. Boeing, Caterpillar, Microsoft, and Tesla are all due to release earnings later today that will influence risk sentiment.

In the futures market, at the time of writing, the DAX30 was down by 104 points, with the Dow down by 77 points.

European Equities: No Major Stats Leaves Geopolitics in Focus

Economic Calendar:

Thursday, 25th October

  • French Manufacturing PMI (Oct) Prelim
  • French Services PMI (Oct) Prelim
  • German Manufacturing PMI (Oct) Prelim
  • German Services PMI (Oct) Prelim
  • Eurozone Manufacturing PMI (Oct) Prelim
  • Eurozone Markit Composite PMI (Oct) Prelim
  • Eurozone Services PMI (Oct) Prelim
  • ECB Deposit Facility Rate (Oct)
  • ECB Interest Rate Decision (Oct)

Friday, 26th October

  • GfK German Consumer Climate (Nov)
  • German Ifo Business Climate Index (Oct)

The Majors

The European majors found support on Monday, to partially reverse losses from the end of last week. Leading the way was the DAX30, which rose by 0.91%.  The CAC40 and EuroStoxx600 weren’t far behind, with gains of 0.21% and 0.61% respectively.

Economic data was on the lighter side on Monday, leaving geopolitics in focus at the start of the week.

UK Parliament voted to delay a meaningful vote on Boris Johnson’s Brexit deal on Saturday, leaving the British PM with little choice but to request another extension.

While the extension is expected to be approved by the EU, there’s still talk of Britain leaving the EU by Halloween.

On Monday, Boris Johnson failed once more to push through a debate on the latest agreement, leaving the Pound in limbo. While the latest news was negative, the request for an extension supported risk appetite on the day.

As far as the European markets were concerned, a no-deal Brexit appears to be averted, which provided support on the day.

The Stats

It was a quiet day on the Eurozone economic calendar on Monday. Germany’s September wholesale inflation figures were the only stats for the markets to consider on the day.

According to Destatis,

  • Producer prices rose by 0.1% in September, month-on-month, which was better than a forecasted 0.2% decline. In August, producer prices had fallen by 0.5%.
  • Energy prices rose by 0.4%, while producer prices excl. energy fell by 0.1%.
  • Prices of intermediate goods fell by 0.3%, while prices of non-durable consumer goods rose by 0.2%.
  • There was also an increase in prices for durable consumer goods, which rose by 0.1%.
  • Prices for capital goods remained unchanged in the month.
  • Year-on-year, producer prices fell by 0.1%, following a 0.3% rise in August. Economists had forecast a 0.3% decline.

There were no material stats out of the U.S to test the majors late in the session.

The Market Movers

For the DAX: It was a bullish day for the auto sector. Continental led the day rising by 1.88%, with Daimler gaining 1.50%. Volkswagen and BMW saw more modest gains of 0.71% and 0.55% respectively.

Bank stocks were also on the move with Commerzbank and Deutsche Bank rallying by 5.32% and by 2.46% respectively.

Leading the way on the day, however, was Wirecard, which rallied by 5.59% on news of appointing KPMG to provide an independent audit. Wirecard had hit the news wires for the wrong reasons recently over its accounting practices.

From the CAC, it was also a positive day for the banks. Credit Agricole and Soc Gen rose by 2.12% and by 1.98% respectively. BNP Paribas wasn’t far behind, gaining 1.75%. For the autos, it was a less eventful day, with Peugeot and Renault rising by 0.34% and by 1.08% respectively.

On the VIX Index

It was back in the red for the VIX on Monday, bringing to an end a run of 3 consecutive days in the green. The VIX Index fell by 1.73%. Partially reversing a 3.34% rise from Friday, the VIX ended the day at 14.0.

The downside came despite Brexit woes, as British PM Boris Johnson failed for the 2nd time to get a meaningful vote on the new Brexit deal.

With no material stats to influence, corporate earnings results from the U.S, weighed on the VIX as the U.S majors also closed out the day in the green. Adding to the downside on the day was optimism on trade, as Trump talked up progress on trade talks.

VIX 22/10/19 Daily Chart

The Day Ahead

It’s another quiet day ahead on the Eurozone economic calendar. There are no material stats due out of the Eurozone to provide the majors with direction on the day.

The lack of stats will leave the markets to respond to events in the UK parliament on Monday. Positive comments from the U.S President on trade talks with China should also provide support.

Late in the session, economic data due out of the U.S is limited to September’s existing home sales figures that will likely be brushed aside by the markets.

On the earnings calendar, EU and U.S corporates are in focus this week, with a number of major U.S companies releasing earnings results.

From the DAX, Daimler is due to release its quarterly earnings results on Thursday. Amazon.com (Thurs), Boeing (Wed), Caterpillar (Wed), Ford Motor Co (Wed), Intel (Thurs), Microsoft (Wed), and Tesla Inc. (Wed) release earnings in the U.S.

In the futures market, at the time of writing, the DAX30 was up by 38 points, with the Dow up by 44 points.

European Equities: A Lack of Stats Leaves Brexit in Focus

Economic Calendar:

Monday, 21st October

  • German PPI (MoM) (Sep)

Thursday, 25th October

  • French Manufacturing PMI (Oct) Prelim
  • French Services PMI (Oct) Prelim
  • German Manufacturing PMI (Oct) Prelim
  • German Services PMI (Oct) Prelim
  • Eurozone Manufacturing PMI (Oct) Prelim
  • Eurozone Markit Composite PMI (Oct) Prelim
  • Eurozone Services PMI (Oct) Prelim
  • ECB Deposit Facility Rate (Oct)
  • ECB Interest Rate Decision (Oct)

Friday, 26th October

  • GfK German Consumer Climate (Nov)
  • German Ifo Business Climate Index (Oct)

The Majors

It was a day in the red for the European majors on Friday, with the CAC40 falling by 0.65% to lead the way. The EuroStoxx600 and DAX30 saw more modest losses of 0.26% and 0.17% respectively.

Uncertainty over the outcome of the Parliamentary vote on Boris Johnson’s Brexit agreement pinned the majors back on the day.

Economic data through the week was also skewed to the negative, weighing on risk appetite on the day.

The Stats

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

While it was also a quiet session in the U.S, on the economic data front, 3rd quarter GDP numbers out of China tested the markets.

China’s economy grew by 1.5%, quarter-on-quarter, in the 3rd quarter, easing from 1.6% in the 2nd quarter. Year-on-year, the economy grew by 6.0%, which was worse than a forecast of 6.1%. In the 2nd quarter, the economy had grown by 6.1%.

The Market Movers

For the DAX: It was a mixed day for the auto sector. Volkswagen led the way rising by 1.04%, with BMW and Daimler rising by 0.87% and by 0.59% respectively. Continental bucked the trend on the day, with a 0.58% loss.

It wasn’t a mixed day for the banks, however, with Commerzbank and Deutsche Bank falling by 1.01% and by 0.41% respectively.

From the CAC, it was a non-eventful day for the banks. BNP Paribas rose by just 0.02%, while both Credit Agricole and Soc Gen ended the day flat. For the autos, it was a bearish day. While Peugeot fell by 1.66%, Renault tumbled by 11.48%, the sell-off coming off the back of a cut in the 2019 earnings forecast.

On the VIX Index

The VIX Index saw green for a 3rd consecutive day on Friday, rising by 3.43%. Following a 0.7% gain on Thursday, the VIX ended the day at 14.3.

Uncertainty over Brexit and disappointing GDP numbers out of China provided the upside on the day.

VIX 21/10/19 Daily Chart

The Day Ahead

It’s a day ahead on the Eurozone economic calendar. Economic data from the Eurozone is limited to Germany’s September wholesale inflation figures.

While forecasts are EUR negative, the data is unlikely to have a material impact on the European majors.

We can expect some risk aversion, however, following the UK Parliament’s vote against Boris Johnson’s latest Brexit agreement with the EU.

Through the course of the day, it will ultimately boil down to what lies ahead. A British snap general election would be a negative for the majors, while talk of a 2nd referendum would be considered a marginally more positive scenario.

In the futures market, at the time of writing, the DAX30 was up by 23.5 points, with the Dow up by 56 points.