The Majors

It was a day in the red for the majors on Thursday. The CAC40 led way down, falling by 0.62% to end the month up by just 0.92%. Things were not much better for the EuroStoxx600, which fell by 0.49% to also end the month up by 0.92%. The DAX30 fared somewhat better, falling by 0.34% to end the month of October up by 3.53%.

Geopolitical risk pressured the majors on Draghi’s final day at the ECB. News of China having doubts over the possibility of a longer-term trade agreement with the U.S did the damage on Thursday.

The negative sentiment impacted in spite of U.S President Trump continuing to deliver positive signals over phase 1 of an agreement.

There was no Brexit chatter to impact as Boris Johnson and the main contenders entered their first day of campaigning.

The Stats

It was a busy day on the Eurozone economic calendar on Thursday. Key stats German retail sales figures and the Eurozone’s 3^rd quarter GDP and prelim October inflation figures. There was also the Eurozone’s unemployment rate to consider.

Prelim October inflation figures out of France and Italy and Spanish GDP numbers had a muted impact on the day.

From Germany, retail sales rose by just 0.1% in September, month-on-month, following a 0.1% decline in August. Economists had forecast a 0.3% rise. According to Destatis, retail sales increased by 3.4% in the same month a year earlier.

Out of the Eurozone,

The economy grew by 0.2% in the 3^rd quarter, quarter-on-quarter, which was at the same pace as in the 2^nd quarter. Economists had forecast 0.1% growth. According to Eurostat,

• Year-on-year, the GDP rose by 1.1%, which was in line with forecasts, whilst easing from 1.2% in the 2^nd

The Eurozone’s unemployment rate held steady at 7.5% in September, while down from 8.0% in September 2018. This was the lowest rate recorded in the Eurozone since July 2008.

According to Eurostat,

• Germany had the lowest unemployment rate at 3.1%, while Greece (16.9% in July) and Spain (14.2%) had the highest unemployment rates.

• Year-on-year Greece saw the largest fall in unemployment, with the unemployment rate falling from 19.1% to 16.9%.

• Cyprus (from 8.0% to 6.6%) and Estonia (from 5.3% to 3.9%) also saw sizeable declines in unemployment.

• Lithuania was the only member state to report an increase, rising from 6.3% to 6.5%.

Prelim October inflation figures were mixed, however.

According to Eurostat,

• The Eurozone’s annual rate of inflation eased from 0.8% to 0.7% in October. By contrast, the annual core rate of inflation picked up from 1.0% to 1.1%.

• Support came from services, with the annual rate of inflation estimated to rise from 1.5% to 1.6%.

• Alcohol & tobacco (1.6% unchanged) and non-energy industrial goods (up from 0.2% to 0.3%) also provided support.

• A more marked fall in energy prices, -3.2% compared with -1.8% in September, weighed on the headline number.