Yahoo Finance

Economic Calendar:

Wednesday, 29^th January

GfK German Consumer Climate (Feb)

Thursday, 30^th January

German Unemployment Change (Jan)

German Unemployment Rate (Jan)

Eurozone Unemployment Rate (Dec)

German CPI (MoM) (Jan) Prelim

Friday, 31^st January 2020

French GDP (QoQ) (Q4) 1st Estimate

German Retail Sales (MoM) (Dec)

French Consumer Spending (MoM) (Dec)

Spanish HICP (YoY) (Jan) Prelim

Spanish CPI (YoY) (Jan) Prelim

Spanish GDP q/q (Q4) 1st Estimate

Eurozone CPI (YoY) (Jan) Prelim

Eurozone Core CPI (YoY) (Jan) Prelim

Eurozone GDP q/q (Q4) 1st Estimate

Eurozone GDP y/y (Q4) 1st Estimate

The Majors

It was a particularly bearish start to the week, with the DAX30 sliding by 2.74% to lead the way down. The CAC40 and EuroStoxx600 weren’t far behind, with losses of 2.68% and 2.26% respectively.

Market concerns over the possible impact of the spread of the coronavirus on China and the global economy weighed on the day.

The losses came despite the World Health Organisation holding back from declaring a global emergency. With borders still open and the death tolls and number infected rising, the virus had spread beyond the region by Monday.

Australia, Canada, and France joined the list of nations reporting cases of the virus.

Economic data out of Germany contributed to the slide in the DAX, with the IFO Business Climate Index figures disappointing at the start of the year.

The Stats

It was a relatively busy day on the Eurozone economic calendar on Monday. Germany’s IFO Business Climate Index figures were in focus in the early part of the European session.

Germany’s IFO Business Climate Index fell from 96.3 to 95.9 in January. Economists had forecast an increase to 97.0.

• The decline came as companies’ took a more pessimistic view on the economy in the coming months. In January, the Business Expectations Index fell from 93.9 to 92.9, falling well short of a forecast of 95.0.

• Sentiment towards current conditions improved, with the sub-index rising from 98.8 to 99.1 but it wasn’t enough to offset the more negative outlook.

Looking across the sectors:

• Manufacturing showed signs of recovery, with the business climate index jumping from -5.0 to -1.6. The upside came from a marked improvement in the current situation index, which saw its largest increase since Feb-17. Companies were also less pessimistic.

• Services weighed, however, with the business climate index falling from 21.3 to 18.7. The business expectations sub-index weighed on the headline number in January.

The Market Movers

For the DAX: It was a bearish start to the week for the auto sector. Volkswagen led the way, sliding by 2.88%, with Continental and Daimler falling by 2.54% and 2.34% respectively. BMW saw a more modest loss of 1.50%.