FX Empire

European Equities: Economic Data and Sentiment Towards Trade to Influence

Bob Mason

In This Article:

Economic Calendar:

Thursday, 16th January 2020

German CPI (MoM) (Dec) Final

ECB Monetary Policy Meeting Minutes

Friday, 17th January 2020

Italian CPI (MoM) (Dec) Final

Eurozone Core CPI (YoY) (Dec) Final

Eurozone CPI (YoY) (Dec) Final

The Majors

It was a mixed day for the European majors on Wednesday, with the DAX30 and CAC40 falling by 0.18% and 0.14% respectively. The EuroStoxx600 bucked the trend, eking out a 0.01% gain.

Market caution ahead of the signing of the phase 1 trade agreement weighed on the majors through the European session. While the phase 1 trade agreement is a step in the right direction, the reality is that existing tariffs will continue to impact global trade.

Accompanied by disappointing economic data, there was little chance of any major gains on the day.

The Stats

It was a relatively busy day on the Eurozone economic calendar on Wednesday. Key stats included Eurozone industrial production and trade data. Both sets of numbers were market negative. GDP numbers out of Germany came in ahead of forecast, however.

According to Eurostat,

  • Industrial production increased by just 0.2%, month-on-month, in November, partially reversing a 0.9% slide in October. Economists had forecast a 0.3% rise.

  • The production of capital goods rose by 1.2% and energy by 0.8%. By contrast, the production of intermediate goods fell by 0.5%, non-durable consumer goods by 0.7% and durable consumer goods by 0.8%.

  • Lithuania (+3.0%) and Malta (+2.6%) record the largest increase in production.

  • Year-on-year, production fell by 1.5%.

The Eurozone’s trade surplus narrowed from €28.0bn to €20.7bn. Economists had forecast a surplus of €23.3bn.

According to Eurostat,

  • Exports of goods to the rest of the world fell by 2.9% to €197.7bn.

  • Imports from the rest of the world slid by 4.6% to €177.0bn, year-on-year.

  • Intra-euro trade fell by 3.8% to €166.0bn.

From Germany, the economy grew by 0.6% in 2019, which was slower than the 1.5% growth in 2018. Economists had forecast a GDP of 0.5%.

According to Destatis,

  • Contributions mainly came from consumption expenditure, with household consumption expenditure rising by 1.6%.

  • Government final consumption expenditure rose by 2.5%.

  • There was also support from gross fixed capital formation, which jumped by 3.8%.

  • In production, the service sector and construction industry delivered higher growth rates. By contrast, industry production (excl. construction) slumped, with output falling by 3.6%.

From the U.S, stats failed to influence in spite of a rise in the NY Empire State Manufacturing Index from 3.5 to 4.8.

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