European Equities: A Week in Review – 24/09/21

The Majors

It was a relatively bullish week for the majors in the week ending 24th September. The CAC40 led the way, rising by 1.04%, with the DAX30 and the EuroStoxx600 seeing gains of 0.27% and 0.31% respectively.

Economic data from the Eurozone failed to impress in the week.

Prelim private sector PMIs for September came in weaker raising further red flags over the economic outlook. German business sentiment also softened, albeit moderately.

While the stats were skewed to the negative, an uncommitted FED delivered the majors with support in the week. The FOMC projections were market friendly, with the FED also holding back on a tapering start date.

From the U.S, economic data was also skewed to the negative, though the numbers were not weak enough to cause concern.

Away from the economic calendar, Evergrande was a key driver, ultimately delivering support.

The Stats

Private sector PMIs and German business sentiment were in focus, with the stats skewed to the negative.

In September, the French Manufacturing PMI fell from 57.5 to 55.2, with the Services PMI down from 56.3 to 56.0.

Germany’s Manufacturing PMI declined from 62.6 to 58.5, with the Services PMI falling from 60.8 to 56.0.

As a result, the Eurozone’s Manufacturing PMI fell from 61.4 to 58.7, and the Services PMI down from 59.0 to 56.3.

According to the Eurozone’s September survey,

  • Business activity grew at a markedly reduced rate, reflecting the peaking of demand in Q3, supply chain bottlenecks, and lingering concerns over the pandemic.
  • Increased concerns over the Delta variant hit business expectations.
  • As a result, the rate of job creation moderated further from July’s 21-year peak.
  • Costs rose at the fastest pace in 21-years, however, as demand continued to outstrip supply.
  • New export order growth slowed to its lowest level since February, cooling sharply in the manufacturing sector.

Germany’s IFO Business Climate Index fell from 99.6 to 98.8, with the Current Assessment sub-index down from 101.4 to 100.4. The Business Expectations sub-index declined from 97.5 to 97.3.

From the U.S

A quiet start to the week left the markets on hold ahead of Wednesday’s FOMC policy decision and projections.

Stats were limited to housing sector numbers that had a muted impact on the Dollar and beyond.

On Wednesday, the FED left policy unchanged as anticipated. The markets had expected a firm timeline on tapering, which didn’t materialize, however. While there were no fixed timelines, the projections revealed a divided camp on the interest rate front, with some pointing to rate hikes from 2022.

It was good enough to deliver Dollar support as central banks elsewhere shifted back due to the Delta variant.

On Thursday, economic data failed to test support for riskier assets, with the stats skewed to the negative.

In the week ending 17th September, initial jobless claims climbed from 335k to 351k.

Prelim private sector PMIs pointed to softer growth, albeit marginally.

In September, the Manufacturing PMI fell from 61.1 to 60.5, with the Services PMI declining from 55.1 to 54.4.

FED Chair Powell wrapped things up at the end of the week, with the FED Chair looking to soften market expectation of rate hikes near-term.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Continental fell by 1.48% to buck the trend. Daimler led the way, however, rallying by 4.56%, with BMW ending the week up by 1.62%. Volkswagen saw a more modest 0.59% gain in the week.

It was also a mixed week for the banking sector. Deutsche Bank slid by 2.21%, while Commerzbank ended the week flat.

From the CAC, it was a bullish week for the banks. Soc Gen rose by 1.07%. Credit Agricole and BNP Paribas led the way, however, rallying by 2.06% and by 2.35% respectively.

It was also a bullish week for the French auto sector. Stellantis NV rose by 0.51%, with Renault rallying by 6.89%.

Air France-KLM led the way, however, surging by 15.17%, with Airbus ending the week up by 2.09%.

On the VIX Index

It was a 2nd consecutive week in red for the VIX in the week ending 24th September.

Following a 0.67% decline from the previous week, the VIX slid 14.70% to end the week at 17.75.

4-days in the red from 5 sessions, which included 14.33% fall on Wednesday and a 10.73% decline on Thursday delivered the downside. A 23.55% jump on Monday limited the downside from the week, however.

For the week, the NASDAQ rose by 0.02%, with the Dow and the S&P500 ending the week up by 0.62% and by 0.51% respectively.

VIX 250921 Weekly Chart

The Week Ahead

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

German consumer sentiment and unemployment figures, along with French consumer spending will be in focus mid-week.

At the end of the week, German retail sales and manufacturing PMIs will also influence.

September PMIs are due out for Italy and Spain, with finalized PMIs for France, Germany, and the Eurozone also in focus.

On the inflation front, prelim September figures for member stats and the Eurozone will also influence. A pickup in inflationary pressure would further question the current the ECB’s current transitory outlook.

From the U.S, it’s also a busy week ahead.

Core durable goods and consumer confidence figures will be in focus early in the week.

In the 2nd half of the week, jobless claims, inflation, personal spending and manufacturing sector data will also influence. Barring any marked revisions, GDP numbers for the 2nd quarter should have a muted impact on the majors.

From China, private sector PMIs will also provide the majors with direction on Thursday. Economic data from China has been on the weaker side in recent months. Softer manufacturing sector growth would test support for the majors.

Away from the economic calendar, expect news updates on Evergrande’s debt woes to also influence.

European Equities: German Business Sentiment and FED Chair Powell in Focus

Economic Calendar

Friday, 24th September

German Ifo Business Climate Index (Sep)

The Majors

It was another bullish day for the European majors on Thursday, with the majors logging a 3rd consecutive day in the green.

The CAC40 rose by 0.98% to lead the way once more, with the DAX30 and the EuroStoxx600 rising by 0.88% and 0.90% respectively.

Market reaction to the FOMC projections from overnight on Wednesday provided support, offsetting disappointing private sector PMI numbers.

Easing concerns over an Evergrande default added further support to the majors on the day.

The Stats

It’s a was a particularly busy day on the Eurozone economic calendar. Prelim private sector PMIs for France, Germany, and the Eurozone were in focus.

In September, the French Manufacturing PMI fell from 57.5 to 55.2, with the Services PMI down from 56.3 to 56.0.

Germany’s Manufacturing PMI declined from 62.6 to 58.5, with the Services PMI falling from 60.8 to 56.0.

As a result, the Eurozone’s Manufacturing PMI fell from 61.4 to 58.7, and the Services PMI down from 59.0 to 56.3.

According to the Eurozone’s September Composite survey,

  • Business activity grew at a markedly reduced rate, reflecting the peaking of demand in Q3, supply chain bottlenecks, and lingering concerns over the pandemic.
  • Increased concerns over the Delta variant hit business expectations.
  • As a result, the rate of job creation moderated further from July’s 21-year peak.
  • Costs rose at the fastest pace in 21-years, however, as demand continued to outstrip supply.
  • New export order growth slowed to its lowest level since February, cooling sharply in the manufacturing sector.

From the U.S

Economic data included the weekly jobless claims and prelim private sector PMI numbers.

In the week ending 17th September, initial jobless claims increased from 335k to 351k. Economists had forecast a fall to 320k.

From the private sector, a slowdown in growth was more modest than seen across the Eurozone.

The Manufacturing PMI slipped from 61.1 to 60.5, with the Services PMI declining from 55.1 to 54.4. As a result, the Composite PMI fell from 55.4 to 54.5. Economists had forecast an increase to 59.5.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. BMW slipped by 0.07% to buck the trend on the day. Continental rallied by 2.66% to lead the way, however, with Daimler ending the day up by 1.55%. Volkswagen rose by a more modest 1.05%.

It was a bullish day for the banks. Deutsche Bank and Commerzbank saw gains of 1.67% and 2.33% respectively.

From the CAC, it was a bullish day for the banks. Soc Gen and Credit Agricole rallied by 2.58% and by 2.65% respectively, with BNP Paribas up by 2.26%.

It was also a bullish day for the French auto sector. Stellantis NV and Renault ended the day up by 1.93% and by 2.83% respectively.

Air France-KLM and Airbus SE saw modest gains of 0.49% and 0.73% respectively.

On the VIX Index

It was a 3rd consecutive day in the red for the VIX on Thursday.

Following a 14.33% slide from Wednesday, the VIX fell by 10.73% to end the day at 18.63.

The NASDAQ rose by 1.04%, with the Dow and S&P500 ending the day up by 1.48% and by 1.21% respectively.

VIX 230921 Daily Chart

The Day Ahead

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

From the Eurozone, Germany’s IFO Business Climate figures will be in focus. Following disappointing PMI numbers from Thursday, we can expect today’s figures to influence.

From the U.S, it’s also a quieter day ahead, with economic data limited to housing sector numbers. While the stats should have a muted impact on the majors, FED Chair Powell is scheduled to speak later in the day. Expect any chatter on the economy or monetary policy to influence.

Away from the economic calendar, Evergrande will continue to be an area of interest.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 27 points.

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

European Equities: FOMC Projections and Private Sector PMIs in Focus

Economic Calendar

Thursday, 23rd September

Spanish GDP (QoQ) (Q2)

French Manufacturing PMI (Sep) Prelim

French Services PMI (Sep) Prelim

German Manufacturing PMI (Sep) Prelim

German Services PMI (Sep) Prelim

Eurozone Manufacturing PMI (Sep) Prelim

Eurozone Markit Composite PMI (Sep) Prelim

Eurozone Services PMI (Sep) Prelim

Friday, 24th September

German Ifo Business Climate Index (Sep)

The Majors

It was another bullish day for the European majors on Wednesday.

The CAC40 rose by 1.29% to lead the way, with the DAX30 and the EuroStoxx600 seeing gains of 1.03% and 0.99% respectively.

There were no major stats to distract the markets following a choppy start to the week, leaving FED monetary policy in focus.

With the markets expecting a firm timeline to begin tapering, uncertainty over the outlook for interest rates remained a test.

While FED uncertainty was a test, Evergrande news updates delivered support for riskier assets on the day. News hit the wires early in the day that Evergrande would meet interest payments, easing immediate concerns of a default.

The Stats

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

From the U.S

Economic data was limited to August housing sector numbers that had a muted impact on market risk sentiment.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Wednesday. BMW and Daimler rallied by 3.46% and by 3.97%, respectively. Continental and Volkswagen also found support, ending the day up by 1.15% and by 2.51% respectively.

It was also a bullish day for the banks. Deutsche Bank and Commerzbank saw gains of 3.81% and 3.79% respectively.

From the CAC, it was a bullish day for the banks. Soc Gen and BNP Paribas rallied by 3.70% and by 3.50% respectively, with Credit Agricole up by 3.27%.

It was also a bullish day for the French auto sector. Stellantis NV and Renault ended the day up by 2.80% and by 3.60% respectively.

Air France-KLM rallied by 4.02%, with Airbus SE rising by 2.26%.

On the VIX Index

It was a 2nd consecutive day in the red for the VIX on Wednesday.

Following a 5.25% fall from Tuesday, the VIX slid by 14.33% to end the day at 20.87.

The NASDAQ rose by 1.02%, with the Dow and S&P500 ending the day up by 1.00% and by 0.95% respectively.

 

The Day Ahead

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

From the Eurozone, prelim September private sector PMIs for France, Germany, and the Eurozone are due out later today.

With concerns lingering over the economic recovery, today’s figures will set the tone going into the final quarter of the year.

From the U.S, initial jobless claims and private sector PMIs will also draw interest, with the services PMI key.

While the stats will influence, the markets will also respond to the FED’s overnight monetary policy decision, press conference, and FOMC projections.

Away from the economic calendar, Evergrande will remain an area of interest.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 33 points.

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

Top Three Ways To Hedge With Options

Ok, so we have FOMC Wednesday, September 22.  What do we do and what can we expect?  First, let me start by saying I don’t think the FED will say anything that will be earth-shattering.  They already pushed the dreaded tapering off until Nov and they will probably use the transitory term to lighten the concerns of inflation, the US, and world economies (think of China).  I also think they will point to better-than-expected inflation numbers and how things were not as bad as projected.  SO what is one to do?

If you are a stock trader chances are you may still have considerable risk on the table.  With the recent semi-market meltdown (Note the markets only fell about 5% since the market high about 2 weeks ago) there may be traders stuck in long positions.

So this begs the question.  What do you do?  Are you sucked down into oblivion with the impending black swan?  Do you cut your losses now and get out and hide?  Or do you try to find a way to protect yourself and minimize your losses?  If you are like me you never like to lose and I am one to never throw in the towel.  If this is you then you can “leverage” options to hedge.  The problem here is most do not understand how to hedge with options.  So here are some “options” on how to use options to hedge.

  1. Use the VIX!  We have all heard this before but the cold truth is many do not understand volatility nor how to hedge with the VIX.  The best way is to use the actual VIX not the spin-off derivative products like UVXY and VXX.  What I do is I will buy a debit spread 6 months out and then finance it by selling a put credit spread.  Yes, this is a 4 leg custom position but usually, if you do this right you can do this for little to no cost and sometimes for a small credit.
  2. Use BackRatio spreads!  Most have NO idea what this is or how they work.  If you are that person check out our service we do these all the time.  You essentially sell an ATM option and then buy two OTM options but to the downside.  The key here is you can do BackRatios to the upside but when volatility crushes (you are a net buyer in this spread) you get sucked into what I call the negative valley of death.  The reverse is true to the downside.  As the underlying goes down volatility rises and thus this expansion helps your positions (because we are net buyers).
  3. Break up your options positions if you are in spreads.  Get out of positions when they are favorable for that part of your spread think the legs of an iron condor.  Or you can roll the unchallenged leg of the iron condor.  You can break up butterflies and sell the profitable parts then when the stock reverses for a day you get out of the other side without the boat anchor pulling you down.

Every day on  Options Trading Signals we do defined risk trades that protect us from black swan events 24/7.  Many may think that is what stop losses are for.  Well, remember the markets are only open about 1/3 of the hours in a day.  Therefore, a stop loss only protects you for 1/3 of each day.  Stocks can gap up or down.  With options, you are always protected because we do defined risk in a spread.  We cover with multiple legs which are always on once you own.

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

Enjoy your day!

Chris Vermeulen
Founder & Chief Market Strategist
www.TheTechnicalTraders.com

 

European Equities: Evergrande News and the FED to Test Support Once More…

Economic Calendar

Thursday, 23rd September

Spanish GDP (QoQ) (Q2)

French Manufacturing PMI (Sep) Prelim

French Services PMI (Sep) Prelim

German Manufacturing PMI (Sep) Prelim

German Services PMI (Sep) Prelim

Eurozone Manufacturing PMI (Sep) Prelim

Eurozone Markit Composite PMI (Sep) Prelim

Eurozone Services PMI (Sep) Prelim

Friday, 24th September

German Ifo Business Climate Index (Sep)

The Majors

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

The CAC40 rose by 1.50% to lead the way, with the DAX30 and the EuroStoxx600 ending the day up by 1.43% and by 1.00% respectively.

There were no major stats to change the mood from Monday’s session, leaving dip buyers to deliver support on the day.

For the majors, the upside came in spite of rating agency Standard & Poor’s stating that an Evergrande default was likely.

The Stats

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

From the U.S

Economic data was limited to August housing sector numbers that had a muted impact on market risk sentiment.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. BMW and Volkswagen rose by 1.14% and by 0.97%, respectively, with Continental ending the day up by 0.47%. Daimler bucked the trend, however, falling by 0.04%.

It was also a mixed day for the banks. Deutsche Bank fell by 1.32%, while Commerzbank rose by 1.19%.

From the CAC, it was a mixed day for the banks. Soc Gen and Credit Agricole fell by 0.33% and by 0.09% respectively, while BNP Paribas rose by 0.41%.

It was a relatively bullish day for the French auto sector, however. Stellantis NV and Renault ended the day up by 0.19% and by 0.20% respectively.

Air France-KLM and Airbus SE rose by 1.49% and by 1.20% respectively.

On the VIX Index

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

Partially reversing a 23.55% surge from Monday, the VIX fell by 5.25% to end the day at 24.36.

On Tuesday, the NASDAQ rose by 0.22%, while the Dow and S&P500 ended the day down by 0.15% and by 0.08% respectively.

VIX 220921 Daily Chart

The Day Ahead

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

There are no major stats to provide the European majors with direction mid-week.

From the U.S there are also no major stats to consider later in the session, leaving the markets in limbo ahead of the FOMC policy decision and projections due out after the European close.

Updates on Evergrande will also be in focus going into the European open.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 49 points.

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

European Equities: A Quiet Economic Calendar to Test Support Further

Economic Calendar

Thursday, 23rd September

Spanish GDP (QoQ) (Q2)

French Manufacturing PMI (Sep) Prelim

French Services PMI (Sep) Prelim

German Manufacturing PMI (Sep) Prelim

German Services PMI (Sep) Prelim

Eurozone Manufacturing PMI (Sep) Prelim

Eurozone Markit Composite PMI (Sep) Prelim

Eurozone Services PMI (Sep) Prelim

Friday, 24th September

German Ifo Business Climate Index (Sep)

The Majors

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

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

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

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

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

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

The Stats

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

From the U.S

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

The Market Movers

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

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

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

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

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

On the VIX Index

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

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

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

VIX 210921 Daily Chart

The Day Ahead

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

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

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

The Futures

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

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

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

Economic Calendar

Monday, 20th September

German PPI m/m (Aug)

Thursday, 23rd September

Spanish GDP (QoQ) (Q2)

French Manufacturing PMI (Sep) Prelim

French Services PMI (Sep) Prelim

German Manufacturing PMI (Sep) Prelim

German Services PMI (Sep) Prelim

Eurozone Manufacturing PMI (Sep) Prelim

Eurozone Markit Composite PMI (Sep) Prelim

Eurozone Services PMI (Sep) Prelim

Friday, 24th September

German Ifo Business Climate Index (Sep)

The Majors

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

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

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

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

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

The Stats

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

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

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

From the U.S

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

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

The Market Movers

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

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

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

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

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

On the VIX Index

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

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

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

VIX 200921 Daily Chart

The Day Ahead

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

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

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

The Futures

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

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

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

The Majors

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

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

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

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

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

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

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

The Stats

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

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

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

Industrial production and trade data were positive, however.

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

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

From the U.S

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

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

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

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

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

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

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

The Market Movers

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

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

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

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

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

On the VIX Index

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

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

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

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

VIX 180921 Weekly Chart

The Week Ahead

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

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

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

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

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

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

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

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

Economic Calendar

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

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

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

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

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

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

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

The Stats

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

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

Trade

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

According to Eurostat,

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

From the U.S

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

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

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

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

The Market Movers

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

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

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

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

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

On the VIX Index

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

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

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

VIX 170921 Daily Chart

The Day Ahead

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

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

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

The Futures

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

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

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

Economic Calendar

Thursday, 16th September

Eurozone Trade Balance (Jul)

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

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

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

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

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

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

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

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

The Stats

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

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

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

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

From the U.S

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

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

The Market Movers

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

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

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

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

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

On the VIX Index

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

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

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

VIX 160921 Daily Chart

The Day Ahead

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

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

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

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

The Futures

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

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

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

Economic Calendar

Wednesday, 15th September

French CPI (MoM) (Aug) Final

French HICP (MoM) (Aug) Final

Italian CPI (MoM) (Aug) Final

Eurozone Wages in euro zone (YoY) (Q2)

Eurozone Industrial Production (MoM) (Jul)

Thursday, 16th September

Eurozone Trade Balance (Jul)

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

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

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

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

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

The Stats

Finalized inflation figures from Spain were in focus on Tuesday.

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

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

From the U.S

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

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

The Market Movers

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

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

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

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

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

On the VIX Index

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

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

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

VIX 150921 Daily Chart

The Day Ahead

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

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

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

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

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

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

The Futures

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

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

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

Economic Calendar

Tuesday, 14th September

Spanish CPI (YoY) (Aug) Final

Spanish HICP (YoY) (Aug) Final

Wednesday, 15th September

French CPI (MoM) (Aug) Final

French HICP (MoM) (Aug) Final

Italian CPI (MoM) (Aug) Final

Eurozone Wages in euro zone (YoY) (Q2)

Eurozone Industrial Production (MoM) (Jul)

Thursday, 16th September

Eurozone Trade Balance (Jul)

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

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

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

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

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

The Stats

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

From the U.S

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

The Market Movers

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

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

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

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

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

On the VIX Index

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

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

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

VIX 140921 Daily Chart

The Day Ahead

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

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

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

The Futures

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

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

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

Economic Calendar

Tuesday, 14th September

Spanish CPI (YoY) (Aug) Final

Spanish HICP (YoY) (Aug) Final

Wednesday, 15th September

French CPI (MoM) (Aug) Final

French HICP (MoM) (Aug) Final

Italian CPI (MoM) (Aug) Final

Eurozone Wages in euro zone (YoY) (Q2)

Eurozone Industrial Production (MoM) (Jul)

Thursday, 16th September

Eurozone Trade Balance (Jul)

Friday, 17th September

Eurozone Core CPI (YoY) (Aug) Final

Eurozone CPI (MoM) (Aug) Final

Eurozone CPI (YoY) (Aug) Fina

The Majors

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

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

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

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

The Stats

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

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

According to Destatis,

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

From the U.S

Wholesale inflation was in focus late in the European session.

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

The Market Movers

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

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

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

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

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

On the VIX Index

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

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

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

VIX 130921 Daily Chart

The Day Ahead

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

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

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

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

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

The Futures

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

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

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

The Majors

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

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

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

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

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

The Stats

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

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

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

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

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

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

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

From the U.S

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

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

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

The Market Movers

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

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

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

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

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

On the VIX Index

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

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

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

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

VIX 110921 Weekly Chart

The Week Ahead

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

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

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

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

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

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

Consumer sentiment figures for September wraps things up on Friday.

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

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

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

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

Economic Calendar

Friday, 10th September

German CPI (MoM) (Aug) Final

The Majors

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

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

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

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

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

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

The Stats

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

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

According to Destatis,

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

Trade with EU Countries:

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

Trade with non-EU Countries:

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

Trade with the UK:

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

Elsewhere:

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

From the U.S

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

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

The Market Movers

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

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

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

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

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

On the VIX Index

It was back into the green the VIX on Thursday.

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

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

VIX 100921 Daily Chart

The Day Ahead

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

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

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

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

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

The Futures

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

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

European Equities: Economic Data and the ECB in Focus

Economic Calendar

Thursday, 9th September

German Trade Balance (Jul)

ECB Interest Rate Decision (Aug)

ECB Press Conference

Friday, 10th September

German CPI (MoM) (Aug) Final

The Majors

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

The DAX30 and the EuroStoxx600 fell by 1.47% and by 1.06% respectively, with the CAC40 ending the day down by 0.85%.

Economic data from the Eurozone was on the lighter side, leaving the negative sentiment from Tuesday to linger.

Concerns over the resilience of the economic recovery weighed on the majors ahead of today’s ECB monetary policy decision.

How the ECB responds to inflationary pressures, previously considered transitory, has also left the markets on unsteady ground.

According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August…

The Stats

French non-farm payrolls were in focus early in the session.

In the 2nd quarter, non-farm payrolls increased by 1.1% quarter-on-quarter. In the previous quarter, payrolls had risen by 1.2%.

From the U.S

JOLT’s job openings were in focus late in the European session.

In July, job openings jumped from 10.185m to 10.934m in July, coming in well ahead of a forecasted 10.000m.

The numbers failed to change the mood, however.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. Volkswagen slid by 3.05% to lead the way, with Daimler ending the day down by 2.44%. BMW and Continental both fell by 2.35% respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank saw losses of 0.46% and 2.35% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole fell by 1.53% and by 1.29% respectively, with Soc Gen ending the day down by 2.11%.

Things were not much better for the French auto sector. Stellantis NV slid by 2.86%, with Renault falling by 0.82%.

Air France-KLM bucked the trend, rising by 0.64%, while Airbus SE fell by 0.33%.

On the VIX Index

It was back into the red the VIX on Wednesday.

Following a 10.54% jump on Tuesday, the VIX fell by 0.99% to end the day at 17.96.

On Tuesday, the NASDAQ declined by 0.57%, with the Dow and S&P500 ending the day down by 0.20% and by 0.13% respectively.

VIX 090921 Daily Chart

The Day Ahead

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

Trade data from Germany will draw interest in the early part of the session. While we can expect market sensitivity to the numbers, the ECB will be the main area of focus on the day.

Later in the day, the ECB will deliver its 1st policy decision of the final quarter of the year. While the markets are expecting tapering to the asset purchasing program, there is some uncertainty over other policy measures.

There’s been plenty of hawkish chatter amidst persistent inflationary pressure. Economic uncertainty remains as a result of the Delta variant, however.

From the U.S, jobless claims will also influence, though the release coincides with Lagarde’s press conference.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 12 points.

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

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

Economic Calendar

Wednesday, 8th September

French Non-Farm Payrolls (QoQ) (Q2)

Thursday, 9th September

German Trade Balance (Jul)

ECB Interest Rate Decision (Aug)

ECB Press Conference

Friday, 10th September

German CPI (MoM) (Aug) Final

The Majors

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

The DAX30 and the EuroStoxx600 fell by 0.56% and by 0.45% respectively, with the CAC40 ending the day down by 0.26%.

Economic data for the Eurozone failed to give the majors a boost, in spite of upbeat GDP numbers. Better than expected industrial production figures from Germany were also not enough as economic sentiment took an unexpected tumble.

From China, trade data had provided some support ahead of the European open.

In August, China’s trade surplus widened from US$56.56bn to US$58.35bn versus a forecasted narrowing to US$51.05bn. Exports were up 25.6%, year-on-year, with imports up 33.1%. In July, exports had been up by 19.3% and imports up by 28.1%. Both sets of figures came in ahead of forecasts.

The Stats

German industrial production and Eurozone 2nd quarter GDP numbers were in focus. ZEW Economic Sentiment figures for Germany and the Eurozone also influenced, however.

Industrial Production

In July, industrial production rose by 1.0%, reversing a 1.0% fall from June. Economists had forecast a 0.9% increase.

According to Destatis,

  • Production in industry excl. energy and construction was up 1.3%.
  • Within industry, the production of capital goods increased 3.2%, with the production of consumer goods up 0.9%.
  • By contrast, the production of intermediate goods fell by 0.5%.
  • Outside industry, energy production was down 3.2%, while production in construction increased 1.1%.

The Eurozone Economy

In the 2nd quarter, the Eurozone economy grew by 2.2%, quarter-on-quarter, which was up from 2nd estimate 2.0%. The economy had contracted by 0.3% in the previous quarter.

Year-on-year, the economy grew by 14.3%, which was up from a 2nd estimate 13.6%. In the 1st quarter, the economy had contracted by 1.3%.

Economic Sentiment

In August, the Germany’s ZEW Economic Sentiment Index slid from 40.4 to 26.5, with the Eurozone’s falling from 42.7 to 31.1. The numbers were enough to weigh on the majors as the continued spread of the Delta variant added further uncertainty.

From the U.S

There were no stats to influence the majors later in the session.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. Volkswagen slid by 1.11% to buck the trend on the day. BMW and Continental both rose by 0.68% respectively, with Daimler ending the day up by 0.41%.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank saw gains of 0.74% and 3.44% respectively.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.39% and by 0.21% respectively, with Soc Gen ending the day up by 0.62%.

It was a bearish day for the French auto sector, however. Stellantis NV slid by 2.46%, with Renault down by 1.39%.

Air France-KLM slipped by 0.28%, with Airbus SE falling by 1.54%.

On the VIX Index

After having ended the day flat on Friday, the VIX rose by 10.54% on Tuesday to end the day at 18.14. The U.S markets were closed on Monday.

On Tuesday, the NASDAQ rose by 0.07%, while the Dow and S&P500 fell by 0.76% and by 0.34% respectively.

VIX 080921 Daily Chart

The Day Ahead

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

French nonfarm payrolls are due out ahead of the European open. We don’t expect too much influence from the numbers, however.

With stats on the lighter side, expect the majors to take their cues from the U.S markets ahead of tomorrow’s ECB policy decision.

From the U.S, it’s another quiet day ahead on the economic calendar. JOLT’s job openings, due out late in the session, will draw some interest, however.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 2 points.

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

European Equities: Economic Data for Germany and the Eurozone in Focus

Economic Calendar

Tuesday, 7th September

German Industrial Production (MoM) (Jul)

German ZEW Current Conditions (Sep)

German ZEW Economic Sentiment (Sep)

Eurozone GDP (QoQ) (Q2)

Eurozone GDP (YoY) (Q2)

Eurozone ZEW Economic Sentiment (Sep)

Wednesday, 8th September

French Non-Farm Payrolls (QoQ) (Q2)

Thursday, 9th September

German Trade Balance (Jul)

ECB Interest Rate Decision (Aug)

ECB Press Conference

Friday, 10th September

German CPI (MoM) (Aug) Final

The Majors

It was a bullish day for the European majors on Monday.

The DAX30 led the way, rising by 0.96%, with the the CAC40 and the EuroStoxx600 ending the day up by 0.80% and by 0.70% respectively.

With the U.S markets closed, the market focus was on economic data from the Eurozone at the start of the week. Economic data from Germany impressed, delivering support to the majors ahead of the ECB policy decision on Thursday.

Away from the economic calendar, rising COVID-19 cases continued to cause concern.

The Stats

German factory orders and construction PMI figures were in focus early in the European session.

In July, factory orders rose by 3.4%, month-on-month, versus a forecasted 1.00% decline. In June, orders had jumped by 4.6%.

According to Destatis,

  • Domestic orders fell by 2.5%, while foreign orders surged by 8.0% in July.
  • New orders from the euro area decreased 4.1%, while new orders from other countries jumped by 15.7% compared with June 2021.
  • Manufacturers of intermediate goods saw new orders slip 0.5%.
  • By contrast, new orders of capital goods rose by 5.4%, with capital goods orders up 7.5%.
  • Consumer goods orders also impressed, increasing by 7.5% in July.

In August, the HIS Markit Construction PMI fell from 47.1 to 44.6. The numbers had a muted impact on the European majors, however.

From the U.S

There were no stats to influence the majors later in the session, with the U.S markets closed for Labor Day.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Volkswagen and BMW rose by 0.25% and 0.80% respectively. Continental and Daimler ended the day down by 1.40% and by 0.03% respectively.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank saw gains of 2.13% and 1.87% respectively.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Soc Gen rose by 0.46% and by 0.40% respectively, with Credit Agricole ending the day up by 0.83%.

It was also a relatively bullish day for the French auto sector. Stellantis NV and Renault rose by 0.65% and by 0.15% respectively.

Air France-KLM ended the day down by 0.56%, while Airbus SE rallied by 1.22%.

On the VIX Index

The U.S markets were closed for Labor Day on Monday. On Friday, the VIX had ended the day flat after having risen by 1.86% on Thursday.

VIX 060921 Daily Chart

The Day Ahead

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

The German economy is back in focus, with industrial trend orders and ZEW Economic Sentiment figures due out.

For the Eurozone, 2nd quarter GDP and ZEW Economic Sentiment figures will also draw interest.

From the U.S, it’s another quiet day ahead on the economic calendar. There are no major stats to provide direction late in the European session.

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

The Futures

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

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

European Equities: German Factory Orders in Focus

Economic Calendar

Monday, 6th September

German Factory Orders (MoM) (Jul)

Germany IHS Markit Construction PMI (Aug)

Tuesday, 7th September

German Industrial Production (MoM) (Jul)

German ZEW Current Conditions (Sep)

German ZEW Economic Sentiment (Sep)

Eurozone GDP (QoQ) (Q2)

Eurozone GDP (YoY) (Q2)

Eurozone ZEW Economic Sentiment (Sep)

Wednesday, 8th September

French Non-Farm Payrolls (QoQ) (Q2)

Thursday, 9th September

German Trade Balance (Jul)

ECB Interest Rate Decision (Aug)

ECB Press Conference

Friday, 10th September

German CPI (MoM) (Aug) Final

The Majors

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

The CAC40 slid by 1.08% to lead the way down, with the the DAX30 and the EuroStoxx600 ending the day down by 0.37% and by 0.56% respectively.

Disappointing economic data from China, the Eurozone, and the U.S weighed on the European majors on Friday.

From China, the Caixin Services PMI slid from 54.9 to 46.7 in August. The numbers followed manufacturing PMI figures from Wednesday, which had shown that the manufacturing sector had contracted in August.

Concerns over the impact of the Delta variant on the economic recovery were validated following the stats in the week.

The Stats

It was a particularly busy day on the Eurozone economic calendar ahead of key stats from the U.S late today.

Service sector PMI numbers for August were in focus along with Eurozone retail sales figures this morning. While the stats were of influence, the markets were holding out for August nonfarm payroll figures from the U.S, however, muting the impact of the numbers on the European majors.

Member State Services

For Spain, the services PMI fell from 61.9 to 60.1 versus a forecasted fall to 61.5.

Italy’s services sector PMI held steady at 58.8, however, versus a forecasted 58.5.

France’s services PMI fell from 56.8 to 56.3, which was down from a prelim 56.4

Numbers from Germany also failed to impress. In August, the PMI fell from 61.8 to 60.8 versus a prelim 61.5.

The Eurozone

In August, the Eurozone’s services PMI fell from 59.8 to 59.0, which was down from a prelim 59.7.

As a result, the Eurozone’s composite PMI fell from 60.2 to 59.0, which was down from a prelim 59.5.

According to the August composite survey,

  • Economic momentum only faded marginally from July’s 15-year peak.
  • Job growth was at the fastest rate seen in over 2-decades as firms look to respond to demand.
  • In August, Italy bucked the trend, registering the fastest output growth for over 15-years.
  • The Euro area saw a strong intake in new work in spite of easing from July levels.
  • Demand was strong, with new manufacturing sector orders leading the way.

Retail Sales

In July, Eurozone retail sales slid 2.3%, month-on-month, reversing a 1.5% increase from June.

From the U.S

Key stats included non-manufacturing PMI and nonfarm payroll figures, both of which were negative for riskier assets.

In August, the ISM Non-Manufacturing PMI fell from 64.1 to 61.7 versus a forecasted decline to 61.5.

Of greater influence, however, were the nonfarm payroll figures. In August, nonfarm payrolls rose by 235k, falling well short of a forecasted 750k. Nonfarm payrolls had jumped by 1,053k in July.

With the FED debate over tapering ongoing, the numbers may have caught a number of the hawks by surprise.

In spite of the weak headline number, unemployment fell from 5.4% to 5.2%, with average hourly wages up 4.3%, year-on-year.  Both beat forecasts.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Friday. Volkswagen and BMW fell by 0.30% and 0.28% respectively. Continental and Daimler ended the day down by 0.39% and by 0.55% respectively.

It was a mixed day for the banks, however. Deutsche Bank fell by 0.24%, while Commerzbank rose by 0.74%.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole slid 1.70% and by 1.93% respectively, with Soc Gen falling by 1.54%.

It was a mixed day for the French auto sector. While Stellantis NV rose by 0.04%, Renault fell by 1.84%.

Air France-KLM and Airbus SE ended the day down by 1.82% and by 1.97% respectively.

On the VIX Index

It was a flat end to the week for the VIX on Friday.

After having risen by 1.86% on Thursday, the VIX gave up gains from earlier in the day to end the day unchanged at 16.41.

The NASDAQ rose by 0.21%, while the Dow and the S&P500 ended the day down by 0.21% and by 0.03% respectively.

VIX 060921 Daily Chart

The Day Ahead

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

The German economy is in focus, with factory orders and construction PMI numbers due out.

Expect factory orders for July to have a greater impact.

From the U.S, there are no stats due out, with the U.S markets closed for Labor Day.

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

European Equities: A Week in Review – 03/09/21

The Majors

It was a mixed week for the majors in the week ending 3rd September. Following modest gains from the week, prior, the DAX30 and the EuroStoxx600 fell by 0.45% and by 0.09% respectively. The CAC40 avoided the red, however, in spite of a 1.08% slide on Friday, with a modest 0.12% gain.

A particularly busy week on the economic calendar left the European majors on the defensive.

Weak data from China was of concern, with China’s private sector contracting in August, according the market’s preferred Markit survey.

Data from the U.S was also on the weaker side, adding to the negative mood as the Delta variant continued to impact.

The Stats

Private sector PMIs for August, French GDP, German unemployment, and prelim August inflation figures were in focus.

While inflationary pressures picked up once more in August, private sector PMIs delivered mixed results in the week.

According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August. The core annual rate of inflation picked up from 0.7% to 1.6%.

French GDP numbers for the 2nd quarter were also upbeat, with the French economy expanding by 1.1% in Q2.  In the previous quarter, the French economy had stagnated.

While Germany’s unemployment rate fell from 5.6% to 5.5% in July, retail sales slid by 5.1%, reversing a 4.5% increase from June. French consumer spending was also woeful, falling by 2.2%. In June, consumer spending had risen by just 0.3%.

Private sector PMIs were weaker but not weak enough to cause a stir.

The Eurozone’s composite PMI fell from 60.2 to 59.0, which was down from a prelim 59.5. In August, the Eurozone’s services PMI fell from 59.8 to 59.0, with the manufacturing PMI declining from 62.8 to 61.4.

From the U.S

Early in the week, consumer confidence figures delivered yet more bad news. In August, the CB Consumer Confidence Index fell from 129.1 to 113.8, as the Delta variant continued to spread.

ADP nonfarm employment change figures on Wednesday also failed to impress. Nonfarm payrolls increased by 374k in August following a modest 326k rise in July.

On Thursday, jobless claim figures were somewhat better, with claims falling from 354k to 340k in the week ending 27th September.

At the end of the week, however, it was official nonfarm payroll figures that were key.

Falling well short of a forecasted 665k increase, payrolls rose by just 243k in August. In July, payrolls had jumped by 1,053k.

In spite of the weak number, the unemployment rate fell from 5.4% to 5.2% to further muddy the waters on FED policy.

From the private sector, the numbers were mixed. The ISM Manufacturing PMI rose from 59.5 to 59.9, while the all-important Non-Manufacturing PMI fell from 64.1 to 61.7.

The Market Movers

From the DAX, it was a mixed week for the auto sector. BMW and Volkswagen saw gains of 1.43% and 0.90% respectively, while Continental and Daimler ended the week down by 3.16% and by 1.54% respectively.

It was a bullish week for the banking sector, however. Deutsche Bank rose by 0.38%, with Commerzbank rallying by 3.42%.

From the CAC, it was a mixed week for the banks. BNP Paribas and Credit Agricole rose by 0.77% and by 0.08% respectively, while Soc Gen slipped by 0.41%.

It was a bearish week for the French auto sector, however. Stellantis NV fell by 0.49%, with Renault sliding by 3.40%.

Air France-KLM and Airbus ended the week down by 2.68% and by 0.47% respectively.

On the VIX Index

It was a back into the green for the VIX in the week ending 3rd September, marking just the 3rd weekly gain in 7-weeks.

Following an 11.69% fall from the previous week, the VIX rose by a modest 0.12% to end the week at 16.41.

2-days in the green from 5 sessions, which included a 1.79% gain on Tuesday delivered the upside.

For the week, the NASDAQ rallied by 1.55%, with the S&P500 gaining 0.58%. The Dow fell by 0.24%, however.

VIX 040921 Weekly Chart

The Week Ahead

It’s another busy week ahead on the economic calendar, with the German economy in focus.

German factory orders and industrial production figures will be in focus on Monday and Tuesday.

On Thursday, German trade data will also draw plenty of attention.

ZEW Economic Sentiment figures for Germany and the Eurozone will also influence on Tuesday.

The main event of the week, however, will be the ECB monetary policy decision.

With the markets expecting the ECB to stand pat on policy, the focus will be on the ECB Press Conference. Will the ECB continue to see reflation as transitory?

From the U.S, it’s a quieter week, however, with JOLTs job openings and weekly jobless claims the key stats. At the end of the week, wholesale inflation figures will also draw interest, however.

Economic data from China will also provide direction following the weak PMI numbers from the week prior.

Inflation and trade data for July are due out in the week.