European Equities 4th Quarter Member State GDP Numbers to Set the Tone

The Stats

It was another relatively quiet day on the Eurozone economic calendar. German consumer sentiment was in focus going into the European session.

For February, the GfK Consumer Climate Index rose from -6.9 to -6.7. Economists had forecast a fall to -7.8.

According to the January study,

• Both economic and income expectations improved as did purchasing propensity.
  • Economic expectations rose by 5.7 points to 22.8.
  • Income expectations increased 10.0 points to 16.9 points.
  • Propensity to buy saw a more modest 4.4-point increase to 5.2 points
• As a result, the GfK is forecasting a 6.7-point decline in consumer sentiment for February, up 0.2 points.
• There was also an increase in the propensity to save, however, which pegged back a more material rise in consumer sentiment.

From the U.S

4^th quarter GDP and jobless claim figures were the key stats of the day.

In the week ending 21^st January, initial jobless claims fell from 290k to 260k, which was in line with forecasts.

Also market positive a marked pickup in economic activity in the final quarter of the year. Quarter-on-quarter, the U.S economy expanded by 6.9% in the 4^th quarter versus 2.3% growth in the previous quarter. Economists had forecast the economy to grow by 5.5%.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Volkswagen led the way, rallying by 1.77%, with Daimler rising by 0.91%. BMW and Continental ended the day down by 0.18% and by 0.98% respectively.

It was also a bullish day for the banks. Deutsche Bank rallied by 4.38%, with Commerzbank gaining 0.71%.

From the CAC, it was a bullish day for the banks. BNP Paribas rose by 0.86%, with Credit Agricole and Soc Gen seeing gains of 0.57% and 0.32% respectively.

The French auto sector had a mixed session, however. Stellantis NV fell by 0.62%, while Renault ended the day up by 0.14%.

Air France-KLM and Airbus SE also found support, rising by 0.25% and by 0.18% respectively.

On the VIX Index

It was a back into the red for the VIX on the Thursday, ending a run of 7 consecutive days in the green.

Reversing a 2.57% rise from Wednesday, the VIX fell by 4.60% to end the day at 30.49.

The NASDAQ slid by 1.40%, with the Dow and the S&P500 seeing losses of 0.02% and 0.54% respectively.

The Day Ahead

It’s a busy day ahead on the Eurozone’s economic calendar. 4^th quarter GDP numbers for France, Germany, and Spain will be in focus. Expect France and Germany’s GDP numbers to be key. French consumer spending figures for December are also due out but should have a muted impact on the majors.

Later in the European session, U.S inflation and personal spending will also provide direction. Following the FED’s hawkish stance on policy, an easing of inflationary pressure and a pickup in spending would be the ideal combination for the majors.

Away from the economic calendar, corporate earnings will also provide direction.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 179 points.

For a look at all of today’s economic events, check out our economic calendar.