European Equities: A Quiet Economic Calendar Leaves Earnings and FED Chair Powell in Focus
Economic Calendar
Tuesday, 9th November
German Trade Balance (Sep)
German ZEW Current Conditions / Economic Sentiment (Nov)
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Eurozone ZEW Economic Sentiment (Nov)
Wednesday, 10th November
German CPI (MoM) (Oct) Final
Thursday, 11th November
ECB Economic Bulletin
ECB Forecasts
Friday, 12th November
French CPI m/m (Oct) Final
French HICP m/m (Oct) Final
Spanish CPI (YoY) (Oct) Final
Spanish HICP (YoY) (Oct) Final
Eurozone Industrial Production (MoM) (Sep)
The Majors
It was another bullish day for the European majors on Friday, with new record highs coming off the back of an extended winning streak.
The CAC40 rose by 0.76% to lead the way, with the DAX30 and the EuroStoxx600 ending the day up by 0.15% and by 0.02% respectively. For the EuroStoxx600, it was yet another new record close, coming off the back of a 7-day winning streak.
Disappointing economic data from Germany pegged back the DAX30 on the day, while corporate earnings continued to provide momentum.
Travel stocks also got a boost off the back news of Pfizer Inc.’s COVID-19 pill effectiveness.
The Stats
It was a quiet Eurozone economic calendar, with German industrial production and Eurozone retail sales in focus.
German Industrial Production
In September, industrial production in Germany fell by 1.1% versus a forecasted 1.0% increase. Production had fallen by 3.5% in August.
According to Destatis,
- Production in industry excl. energy and construction was down 1.5%.
- Within industry, the production of capital goods fell by 2.8% and of intermediate goods by 1.1%.
- Motor vehicle, trailer, & semi-trailer manufacturing increased by 2.1%, partially reversing an 18.9% tumble from August.
- Consumer goods production saw a modest 0.2% rise.
- Outside industry, energy production was up 1.0%, with production in construction rising by 1.1%.
Eurozone Retail Sales
In September, retail sales slipped by 0.3% versus a forecasted 0.3% increase. Retail sales had risen by 1.0% in August.
According to Eurostat,
- Non-food product sales fell by 1.5%, while food, drinks, & tobacco sales rose by 0.7%.
- Automotive fuel sales increased by 1.1%.
- By member state, Estonia (+7.1%), Slovakia (+2.9%), and Luxembourg (+2.3%) recorded the largest increases in sales.
- Germany (-2.5%), however, recorded the largest decline in the month of September.
- Compared with September 2020, retail sales increased by 2.5%.
From the U.S
Nonfarm payrolls were in focus in the wake of the FED’s policy decision and forward guidance late on Wednesday.
In October, nonfarm payrolls jumped by 531k following a 312k increase in September. As a result, the unemployment rate fell from 4.8% to 4.6%.
The Market Movers
For the DAX: It was a bullish day for the auto sector on Friday. Volkswagen rallied by 2.75% to lead the way, with, BMW up 1.68%. Continental and Daimler saw more modest gains of 0.55% and 0.70% respectively.
It was also a bullish day for the banks. Deutsche Bank rose by 1.00%, with Commerzbank rallying by 2.61%.
From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen rose by 0.73% and by 0.94% respectively, with Credit Agricole up by 1.01%.
It was also a bullish day for the French auto sector. Stellantis NV and Renault ended the day with gains of 0.44% and 1.80% respectively.
Air France-KLM rallied by a further 4.60%, with Airbus SE up by 4.50%.
On the VIX Index
It was a 2nd consecutive day in the green for the VIX on Friday.
Following a 2.25% gain on Thursday, the VIX rose by 6.74% to end the day at 16.48.
The Dow rose by 0.56%, with the NASDAQ and the S&P500 ending the day up by 0.20% and by 0.37% respectively.
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.
There are also no major stats from the U.S to influence later in the day.
The lack of stats will leave corporate earnings and news updates on Pfizer Inc.’s COVID-19 pill to provide direction.
Ahead of the open, China trade data from the weekend will set the tone, however.
In October, China’s USD trade surplus widened from US$66.76bn to US$84.54bn. Economists had forecast a narrowing to US$65.55bn.
- Year-on-year, exports were up 27.7% versus a forecasted 24.5%. In September, exports had risen by 28.1%.
- Imports increased by 20.6%, versus a forecasted 25.0%. Imports had risen by 17.6% in September.
Away from the economic calendar, corporate earnings will also influence ahead of a FED Chair Powell speech late in the session.