European Equities: A Lack of Stats Leaves Direction Hinged on Trade

Another quiet day on the calendar leaves trade updates and the FOMC meeting minutes in focus.
Bob Mason
Financial stock market numbers and forex trading graph, business and stock market data, financial investment concept on bull and bear shapes symbols background.

Economic Calendar:

Wednesday, 20th November 2019

  • German PPI (MoM) (Oct)

Thursday, 21st November 2019

  • ECB Monetary Policy Meeting Minutes

Friday, 22nd November 2019

  • German GDP (YoY) (Q3) 2nd Estimate
  • German GDP (QoQ) (Q3) 2nd Estimate
  • French Manufacturing PMI (Nov) Prelim
  • French Services PMI (Nov) Prelim
  • German Manufacturing PMI (Nov) Prelim
  • German Services PMI (Nov) Prelim
  • Eurozone Manufacturing PMI (Nov) Prelim
  • Eurozone Markit Composite PMI (Nov) Prelim
  • Eurozone Services PMI (Nov) Prelim

The Majors

It was a mixed day for the European majors on Tuesday. While the CAC40 and EuroStoxx600 fell by 0.35% and 0.12% respectively, the DAX30 bucked the trend with a 0.11% gain.

A lack of progress towards a U.S – China phase 1 trade agreement weighed on the majors late in the day.

On Tuesday, the majors slid back from early highs. The pullback came in response to Trump stating that he would raise tariffs should a trade deal not materialize.

It wasn’t a new threat, however, with similar comments having been made in recent weeks. Trump is all too aware of China wanting to delay a deal in hopes of a Democratic victory in next year’s presidential election…

The Stats

It was another quiet day on the Eurozone economic calendar on Tuesday. There were no material stats from the Eurozone with direction.

From the U.S, October housing starts and building permit figures had little influence late in the day.

The Market Movers

For the DAX: After a mixed start to the week, it was a day in the green for the auto sector, in spite of the negative chatter on trade. Volkswagen led the way, rising by 0.77%, with Continental and Daimler up by 0.26% and by 0.15% respectively. BMW ended the day flat, rising by just 0.01%.

It was a bearish for the banks, however. Deutsche Bank fell by 0.42%, with Commerzbank down by 0.43%.

From the CAC, bank stocks found further support. Soc Gen and BNP Paribas led the way, rising by 0.37% and by 0.32% respectively. Credit Agricole ended the day flat.

It was a mixed session for French Autos, however. While Peugeot slid by 1.35%, Renault gained 1.23% on the day.

On the VIX Index

It was a 2nd consecutive day in the green on Tuesday, with the VIX rising by 3.21%. Following on from a 3.4% gain on Monday, the VIX ended the day at $12.9.

Negative sentiment towards trade continued to provide support, in spite of the S&P500 falling by just 0.06% on the day.

The Day Ahead

It’s a quiet day ahead on the Eurozone economic calendar. October wholesale inflation figures are due out of Germany in the early part of the day.

We would expect the stats to have a limited impact on the day, however, with the market focus likely to remain on trade.

Updates from Beijing and Washington will need to be more aligned for the markets to find support on the day.

With no stats due out of the U.S later today, there may be some caution as the FED releases its monetary policy minutes after the European close.

In the futures market, at the time of writing, the DAX30 was up by 19 points, while the Dow was down by 2 points.

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