In This Article:
Economic Calendar
Wednesday, 12th January
Eurozone Industrial Production (MoM) (Nov)
Friday, 14th January
French CPI (MoM) (Dec) Final
French HICP (MoM) (Dec) Final
Spanish CPI (YoY) (Dec) Final
Spanish HICP (YoY) (Dec) Final
Eurozone Trade Balance (Nov)
ECB President Lagarde Speaks
The Majors
It was a bullish day for the European majors on Tuesday. The DAX30 rallied by 1.10%, with the CAC40 and the EuroStoxx600 rising by 0.95% and by 0.84% respectively. Tuesday’s gains brought to an end a 3-day losing streak.
A quiet economic calendar left the majors in the hands of ECB President Lagarde and FED Chair Powell. Market jitters over persistent inflationary pressure and possible influence on monetary policy has tested support for riskier assets at the turn of the year.
Away from the economic calendar, earnings were back in focus, with optimism of another upbeat season adding to the upside. The gains were not enough to fully reverse Monday’s sell-off, however, as the markets await U.S inflation figures due out today and tomorrow.
The Stats
There were no major stats for the markets to consider. In spite of the anticipation, there were no policy related comments from the ECB President to influence.
From the U.S
There were also no major stats from the U.S to provide the majors with direction late in the day. The lack of stats left the spotlight on FED Chair Powell, who gave testimony to lawmakers.
Market reaction to testimony was positive, with the FED Chair stating that the economy can cope with the tightening monetary policy. Powell noted that the economy has expanded rapidly in spite of COVID-19. On the inflation front, Powell said that inflation needs more attention. The FED will ensure that high inflation does not become entrenched. Powell also noted that, while a move on monetary policy to normal is needed, it’s a long road to normal.
The Market Movers
For the DAX: It was another mixed day for the auto sector on Tuesday. Continental and Daimler ended the day down by 0.59% and by 0.70% respectively. BMW rose by 0.84%, however, with Volkswagen gaining 0.33%.
It was a bearish day for the banks. Deutsche Bank fell by 0.48%, with Commerzbank sliding by 4.12%.
From the CAC, it was a mixed day for the banks. Credit Agricole slipped 0.19%, while Soc Gen and BNP Paribas ended the day up by 0.20% and by 0.56% respectively.
The French auto sector also had a mixed session. Stellantis NV rallied by 2.09%, while Renault ended the day with a 1.26% loss.
Air France-KLM and Airbus SE saw modest gains of 0.26% and by 0.42% respectively.
On the VIX Index
It was back into the red for the VIX on Tuesday. Reversing a 3.41% gain from Monday, the VIX fell by 5.10% to end the day at 18.41.