European Equities: Another Busy Economic Calender to Provide Direction
Economic Calendar
Tuesday, 4th January
German Retail Sales (MoM) (Nov)
French CPI m/m (Dec) Prelim
French HICP m/m (Dec) Prelim
German Unemployment Change (Dec)
German Unemployment Rate (Dec)
Wednesday, 5th January
Spanish Services PMI (Dec)
Italian Services PMI (Dec)
French Services PMI (Dec) Final
German Services PMI (Dec) Final
Eurozone Markit Composite PMI (Dec) Final
Eurozone Services PMI (Dec) Final
Thursday, 6th January
German Factory Orders (MoM) (Nov)
IHS Markit Construction PMI (Dec)
German CPI (MoM) (Dec)
Friday, 7th January
German Industrial Production (MoM) (Nov)
German Trade Balance (Nov)
French Consumer Spending (MoM) (Nov)
Eurozone CPI (YoY) (Dec) Prelim
Eurozone Retail Sales (MoM) (Nov)
The Majors
It was a bullish start to the year for the European majors, with the CAC40 and DAX30 rising by 0.90% and by 0.86% respectively. The EuroStoxx600 ended the day up by 0.45%.
A busy economic calendar distracted the markets from COVID-19 stats from the weekend. A continued rise in new cases failed to raise question markets over the resilience over the economic recovery. PMI numbers from the Eurozone provided strong support, with sub-components of the PMIs also market positive.
Away from the economic calendar, continued reports of the Omicron strain being milder was key to the bullish start.
The Stats
Manufacturing PMI figures for Italy and Spain were in focus. Finalized manufacturing PMIs for France, Germany, and the Eurozone also drew interest, however.
Member State Manufacturing PMIs
Spain’s Manufacturing PMI fell from 57.1 to 56.2 in December, which was in line with forecasts.
In December, Italy’s Manufacturing PMI declined from 62.8 to 62.0. Economists had forecast for the PMI to fall to 61.5.
According to finalized figures:
France’s Manufacturing PMI slipped from 55.9 to 55.6, which was up from a prelim 54.9.
In November, Germany’s Manufacturing PMI held steady at 57.4, which was down from a prelim 57.9.
The Eurozone
According to finalized figures, the Eurozone’s Manufacturing PMI fell from 58.4 to a 10-month low 58.0 in December, which was in line with prelim.
According to the December survey,
Average lead times lengthened to the softest extent since February.
As a result of easing supply chain issues, firms added purchases to their inventories at the fastest pace ever recorded.
In spite of this, output growth remained unchanged.
Input cost and output price inflation eased, though remained among the fastest ever seen by the survey.
New manufacturing orders increased at the joint-weakest rate since January as a result of weaker overseas demand.
Rising outstanding work led to a pickup in the pace of hiring.
By Country,
Italy ranked 1st, with a 2-month low PMI of 62.0, followed by Greece (59.0).
France sat at the bottom of the table with a 2-month low PMI of 55.6.
Spain’s PMI fell to a 10-month low 56.2 to sit just above France.
From the U.S
In December, the U.S Manufacturing PMI fell from 58.3 to 57.7 versus a prelim 57.8.
The Market Movers
For the DAX: It was a bullish day for the auto sector on Monday. BMW and Continental both ended the day up by 3.21% respectively. Daimler and Volkswagen saw more modest gains of 1.64% and 1.87% respectively.
It was also a bullish day for the banks. Deutsche Bank rose by 3.00%, with Commerzbank rallying by 4.51%.
From the CAC, it was a bullish day for the banks. BNP Paribas rose by 0.71%, with Credit Agricole and Soc Gen ending the day up by 1.50% and by 0.83% respectively.
The French auto sector also had a bullish session. Stellantis NV and Renault saw gains of 3.85% and 2.85% respectively.
Air France-KLM found much-needed support, rallying by 4.88%, with Airbus SE rising by 3.36%
On the VIX Index
It was a 2nd consecutive day in the red for the VIX on Monday, marking an 8th loss in 9-sessions.
Following a 0.63% decline on Friday, the VIX fell by 3.60% to end the day at 16.60.
The NASDAQ rose by 1.20%, with the Dow and the S&P500 gaining 0.68% and 0.64% respectively.
The Day Ahead
It’s another busy day ahead on the Eurozone’s economic calendar. French inflation figures and German retail sales and unemployment numbers will be in focus early in the session.
While the unemployment numbers are key, expect plenty of interest in retail sales and inflation.
Ahead of the European open, manufacturing PMI numbers from China will set the tone.
From the U.S, the market’s preferred ISM Manufacturing PMI and JOLT’s job openings will also influence late in the session.
Away from the economic calendar, COVID-19 news will need continued monitoring, however.
The Futures
In the futures markets, at the time of writing, the Dow Mini was down by 6 points, with the DAX down by 19 points.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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