FX Empire

European Equities: Futures Sink as Risk Aversion Sweeps Across the Global Financial Markets

Bob Mason

In This Article:

Economic Calendar:

Tuesday, 7th January 2020

Eurozone CPI (YoY) (Dec) Prelim

Eurozone CPI Core (YoY) (Dec) Prelim

Eurozone Retail Sales (MoM) (Nov)

Wednesday, 8th January 2020

German Factory Orders (MoM) (Nov)

Thursday, 9th January 2020

German Industrial Production (MoM) (Nov)

German Trade Balance (Nov)

Eurozone Unemployment Rate (Nov)

ECB Monetary Policy Meeting Minutes

The Majors

It was a mixed day for the European majors on Tuesday, with the DAX30 and EuroStoxx600 rising by 0.76% and 0.25% respectively. The CAC40 bucked the trend on the day, slipping by 0.02%.

Gains on the day came as markets assessed the likely impact of an all-out U.S – Iran war on the global economy.

A lack of an immediate military response by Iran also provided some much-needed support on the day. The support was temporary…

The Stats

It was a relatively busy day on the Eurozone economic calendar on Tuesday. Key stats included the Eurozone’s prelim December inflation numbers and November retail sales figures.

According to Eurostat, the annual rate of inflation picked up from 1.0% to 1.3% in December, with the core annual rate of inflation holding steady at 1.3%. The figures were in line with forecasts.

  • Food, alcohol & tobacco prices increased by 2.0%, compared with 1.9% in November.

  • Prices for services rose by 1.8%, following a 1.9% increase in November, also contributing to the upside.

  • There were also increases in prices for non-energy industrial goods (+0.4%), and energy (+0.2%).

Retail sales figures impressed on the day, with Eurozone retail sales rising by 1.0%, month-on-month, to reverse a 0.3% decline from October.

According to Eurostat,

  • Sales of non-food products rose by 1.4%, with the sale of food, drinks & tobacco rising by 0.7%.

  • Automotive fuel sales fell by 1.0%, however.

  • By member state, Belgium and Latvia recorded the largest increases in sales, with increases of 2.7% and 2.6% respectively.

  • Ireland reported the largest decline, falling by 0.9%.

  • Year-on-year, retail sales rose by 2.2%.

From the U.S

The market’s preferred ISM Non-Manufacturing PMI figures provided support, with the PMI rising from 53.9 to 55.0 in December. Factory orders had limited influence, in spite of a 0.7% fall in November. Economists had forecast a 0.8% decline.

The Market Movers

For the DAX: It was another mixed day for the auto sector. BMW and Continental led the way, rising by 1.90% and by 1.20% respectively, with Daimler up by a more modest 0.52%. Volkswagen bucked the trend, falling by 0.68%.

It was a bullish day for the banks, however. Commerzbank rose by 1.73%, while Deutsche Bank rallied by 3.01% on the day.

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