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Economic Calendar:

Friday, 18th March

German PPI (MoM) (Feb)

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The Majors

It was a bullish day for the European majors on Thursday. The DAX30 rallied by 1.23%, with CAC40 and the EuroStoxx600 gaining 0.13% and 0.46% respectively.

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Market reaction to the FOMC projections and rate statement provided the majors with direction. The markets brushed aside disappointing trade data from the Eurozone and mixed stats from the U.S on the day.

The Stats

It was a relatively quiet day on the economic calendar on Thursday. 4th quarter wage growth and January trade data for the Eurozone were in focus.

In the 4th quarter, wages grew by 3.5%, following 2.2% growth in the 3rd quarter.

Trade data was of greater influence early in the European session, however.

In January, the trade surplus narrowed from €29.2bn to €6.3bn.

According to Eurostat,

Compared with January 2020:

  • Exports of goods to the rest of the world fell by 11.4%, year-on-year, to €163.1bn.
  • Imports of goods from the rest of the world fell by 14.1% to €156.8bn.
  • Inter-euro area trade fell by 3.9% to €159.7bn in January 2021.

Compared with January – December 2019:

  • Euro area exports of goods to the rest of the world fell by 9.2% in January to December 2020 to €2,131.4bn.
  • Imports fell by 10.8% to €1,897.1bn over the same time period.
  • As a result, the euro area recorded a surplus of €234.3bn, compared with €221.0bn in January to December 2019.

From the U.S

Philly FED manufacturing and weekly jobless claims were in focus later in the session.

In March, the Philly FED Manufacturing Index jumped from 23.1 to 51.8. Economists had forecasted a fall to 23.0.

According to the March survey,

  • The index hit a 50-year high in March.
  • Nearly 59% of the firms reported increases in current activity compared with 35% from the previous month.
  • Only 7% reported decreases, which was down from 11% in February.
  • Current orders also jumped to a 50-year high, rising 28 points to 50.9.
  • The current employment index increased from 25.3 to 30.1, with only 1% of firms reporting decreases in employment.

In the week ending 12th March, initial jobless claims rose from a revised 725k to 770k. Economists had forecast claims to fall to 700k.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Volkswagen slid by 4.68%, with BMW and Continental falling by 1.15% and by 0.04% respectively. Daimler ended the day up by 2.77%.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank rallied by 3.38% and by 4.34% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole rose by 2.34% and by 2.18% respectively, with Soc Gen rallying by 3.87%.

It was also a bullish day for the French auto sector. Stellantis NV and Renault rose by 3.08% and by 1.11% respectively.

Air France-KLM slipped by 0.38%, while Airbus SE ended the day up by 0.10%.

On the VIX Index

A run of 6 consecutive days in the red came to an end for the VIX on Thursday, marking just a 2nd gain in 9 sessions.

Reversing a 2.83% loss from Wednesday, the VIX rose by 12.22% to end the day at 21.58.

The NASDAQ slid by 3.02%, with the Dow and the S&P500 seeing losses of 0.46% and 1.48% respectively.

The Day Ahead

It’s a relatively quiet day ahead on the European economic calendar. Key stats include wholesale inflation figures from Germany.

Barring a material pickup in German wholesale inflationary pressure, the numbers are unlikely to have a material impact on the majors.

From the U.S session, there are no material stats to provide the European majors with direction.

The lack of stats will leave the majors in the hands FOMC member chatter and yields.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 5 points.

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

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