European Equities: A Busy Economic Calendar to Test the Majors

The Majors

It was a bearish day for the European majors on Tuesday.

The EuroStoxx600 fell by 0.38%, with the CAC40 and the DAX30 ending the day down by 0.11% and by 0.33% respectively.

Disappointing economic data from China failed to spoil the mood as dovish FOMC member chatter drove demand for riskier assets.

In August, China’s NBS Manufacturing PMI slipped from 50.4 to 50.1. More significantly was a slide in the Non-Manufacturing PMI from 53.3 to 47.5.

From the U.S, consumer confidence figures also influenced late in the session, while economic data from the Eurozone drew plenty of attention early in the session.

The Stats

French GDP and consumer spending figures, along with German unemployment numbers were in focus early in the day.

French Economy

In the 2^nd quarter, the French economy expanded by 1.1%, quarter-on-quarter, after having stalled in the previous quarter. Economists had forecast growth of 0.9%

Consumer spending disappointed, however, with spending falling by 2.2% in July to reverse a 0.3% rise from June. Economists had forecast a 0.5% decline.

German Economy

Unemployment fell by 53k in August, following a 90k slide from July. Economists had forecast a 40k decline.

As a result, the unemployment rate fell from a revised 5.6% to 5.5%. Economists had forecast for the unemployment rate to hold steady at the revised 5.6%.

Inflation

French, Italian, and the all-important Eurozone inflation figures were also in focus and key for the markets.

French consumer prices rose by 0.6% in August, according to prelim figures, following a 0.1% increase in July.

France’s annual rate of inflation accelerated from 1.2% to 1.9%. Economists had forecast an annual rate of inflation of 1.6%.

Italy also saw inflationary pressures build, with the annual rate of inflation picking up from 1.9% to 2.1%.

Of greater significance, however, were Eurozone inflation figures.

According to prelim figures, the Eurozone’s annual rate of inflation picked up from 2.2% to 3.0% versus a forecasted 2.7%.

The core annual rate of inflation accelerated from 0.7% to 1.6%. Economists had forecast a core annual rate of inflation of 1.4%.

According to Eurostat,

• Energy is expected to have the highest annual rate in August (15.4% compared with 14.3% in July).
• Non-energy industrial goods saw the annual rate pick up from 0.7% to 2.7%.
• There were also contributions from food, alcohol, & tobacco (2.0% compared with 1.6% in July) and services (1.1% compared with 0.9% in July).

From the U.S

Key stats included August’s Chicago PMI and, more importantly, consumer confidence figures for August.

Chicago’s PMI fell from 73.4 to 66.8 in August. Economists had forecast a decline to 68.0.

In August, the CB Consumer Confidence Index fell from 129.1 to 113.8 versus a forecasted 124.0.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. BMW bucked the trend, rallying by 1.57%, while Continental fell by 1.38%. Daimler and Volkswagen ended the day down by 0.73% and by 0.34% respectively.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank rose by 0.38% and by 1.09% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole rose by 1.38% and by 1.01% respectively, with Soc Gen gaining by 1.50%.

It was a mixed day for the French auto sector. Stellantis NV fell by 0.38%, while Renault rose by 1.35%.

Air France-KLM fell by 0.80%, while Airbus SE ended the day up by 0.73%.

On the VIX Index

It was back into the green for the VIX on Tuesday, ending a 2-day losing streak.

Reversing a 1.22% fall from Monday, the VIX rose by 1.79% to end the day at 16.48.

The NASDAQ slipped by 0.04%, with the Dow and the S&P500 ending the day down by 0.11% and by 0.13% respectively.