European Equities: A Busy Economic Calendar and FED Chair Powell Testimony in Focus

The Majors

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

The EuroStoxx600 and CAC40 rose by 0.78% and by 0.54% respectively, with the DAX30 ending the day up by 0.16%.

Economic data took a back seat on the day, with the markets in calm mode after Friday’s flight to safety. The upside was relatively modest, however, with COVID-19 uncertainty pegging the majors back.

The Stats

Member State Inflation

Spain’s annual rate of inflation picked up from a revised 5.4% to 5.5% versus a forecasted 4.0%. The HICP increased by 5.6% in November, year-on-year. In October, the HICP had been up by 5.4%.

According to Ine.es,

• Prices for COVID-19 services were up 13.4% year-on-year, with prices for COVID-19 goods up 2.5%.
• Year-on-year pries for food and non-alcoholic beverages were up 3.2%, with prices for unprocessed food up 3.7%.
• Processed food prices were up by 2.5% year-on-year in November.
• Month-on-month, consumer prices rose by 0.4%.

Germany’s annual rate of inflation accelerated from 4.5% to 5.2% in November versus a forecasted 5.0%. Month-on-month, however, consumer prices slipped by 0.2%, partially reversing a 0.5% rise from October. Economists had forecast a 0.4% decline.

According to Destatis,

• Prices for goods were up 5.2%, driven by a 22.1% rise in energy prices year-on-year.
• Food prices rose by a relatively modest 4.5%.
• Prices for services rose by 2.8% year-on-year, with prices for rents up 1.4%.

Eurozone Economic Sentiment and Consumer Confidence

In November, the Economic Sentiment Indicator fell from 118.6 to 117.5, with the consumer confidence index down from -4.8 to -6.8, which were in line with forecasts.

According to the EU Commission,

The Employment Expectations Indicator increased by 1.7 points to 115.6, the highest level since Jan-2018.

From the U.S

Economic data was limited to housing sector data that had a muted impact on the majors.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. BMW and Volkswagen found support, rising by 0.13% and by 0.99% respectively. Continental slid by 4.27% to lead the way down, however, with Daimler ending the day down by 0.07%.

It was a bearish day for the banks. Deutsche Bank and Commerzbank saw losses of 0.47% and 1.03% respectively.

From the CAC, it was a bullish day for the banks. Soc Gen rose by 0.81, with Credit Agricole and BNP Paribas seeing gains of 0.55% and 0.16% respectively.

The French auto sector had a mixed session. Stellantis NV rose by 0.02%, while Renault ended the day down by 1.57%.

Air France-KLM and Airbus SE ended the day up by 0.50% and by 0.33% respectively.

On the VIX Index

It was back into the red for the  VIX on Monday, as the U.S equity markets looked to recoup Friday’s sell-off.

Partially reversing a 54.04% surge from Friday, the VIX slid by 19.78% to end the day at 22.96.

The Dow rose by 0.68%, with the NASDAQ and the S&P500 seeing gains of 1.88% and 1.32% respectively.