European Equities A Busier Economic Calendar to Test the Majors Following Monday’s Rally

The Majors

It was a bullish start to the week for the European majors on Monday.

The DAX30 and EuroStoxx600 rose by 1.39% and by 1.40% respectively, with the CAC40 ending the day up by 1.48%.

Disappointing economic data from Germany failed to rock the boat, with investors jumping back in off the back of strong moves in the U.S futures. While uncertainty over Omicron remains, a lack of adverse news over the effects of the virus provided sidelined investors opportunity at the start of the week.

Mid-way through the European session, chatter from the Eurogroup meeting also influenced. Comments were upbeat towards the economic recovery, with assurances of continued fiscal policy support also market positive. See here for comments from Pashchal Donohoe following the 6^th December meeting.

The Stats

It was a relatively quiet Eurozone economic calendar this morning. German factory orders were in focus going into the European open.

Factory Orders

In October, factory orders tumbled by 6.9%, month-on-month, versus a forecasted 0.5% decline. In September, orders had risen by 1.8%.

According to Destatis,

• Domestic orders increased by 3.4%, month-on-month, while foreign orders tumbled by 13.1%.
• New orders from the euro area decreased by 3.2%.
• A fall in new orders from other countries slumped by 18.1%, reversing a 15.7% increase from the previous month. The decline was as a result of the absence of major orders in the sector of manufacture of machinery and equipment.
• Producers of intermediate goods saw orders fall by 2.7%, with orders of capital goods sliding by 10.7%.
• Consumer goods orders rose by 4.3%, however.
• Not including major orders, new orders fell by 1.8%, when compared with Sep-2021.
• Compared with Oct-2020, new orders fell by 1.05. This was the first decrease since Sep-2020.

From the U.S

There were no material stats to provide the majors with direction later in the day.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Monday. Volkswagen led the way, rallying by 3.79%, with Continental ending the day up by 2.59%. BMW and Daimler saw gains of 1.54% and by 0.78% respectively.

It was also a bullish day for the banks. Deutsche Bank and Commerzbank rallied by 4.28% and by 2.01% respectively.

From the CAC, it was a bullish day for the banks. Soc Gen and Credit Agricole saw gains of 1.02% and 0.62% respectively, with BNP Paribas rising by 2.08%.

The French auto sector had a mixed session. Stellantis NV rallied by 4.09%, with Renault ending the day up by 2.51%.

Air France-KLM and Airbus SE were amongst the front runners, however, rallying by 5.95% and by 4.35% respectively.

On the VIX Index

It was a back into the red for the  VIX on Monday.

Reversing a 9.73% rise from Friday, the VIX slid by 11.38% to end the day at 27.18.

The Dow rallied by 1.87%, with the NASDAQ and the S&P500 seeing gains of 0.93% and 1.17% respectively.