European Equities: A Quiet Economic Calendar Leaves Omicron News to Test the Majors

According to Destatis,

• The annual rate of wholesale inflation was the most marked since Nov-1951 (+20.6%).
• Rising energy prices (+49.4%) contributed to the increase in producer prices when compared with Nov-2020.
• There were also marked prices increases on intermediate goods (+19.1%), driven by a 79.1% surge in prices of secondary raw materials.
• Prices of non-durable consumer goods increased by 3.7%, year-on-year, driven by prices for oils and fats.

German Business Sentiment

For December, the Ifo Business Climate Index fell from 96.5 to 94.7 versus a forecasted decline to 95.3.

Weighing on the headline number was a fall in the Business Expectations indicator from 94.2 to 92.6 and the Current Assessment indicator from 99.0 to 96.9.

According to the December survey,

German Manufacturing:

• The business climate index rose from 16.7 to 17.3, after having fallen for 5 consecutive months from a June 28.9.
• More optimistic expectations contributed, with order books on the rise.
• Companies’ assessments of the current situation were worse, however, with supply bottlenecks for intermediate products and raw materials intensified once more.

Services:

• The business climate slumped from 11.6 to 4.5, with the last similar size decline registered in April 2020.
• Service providers were considerably less satisfied with their current business.
• Expectations also turned pessimistic.

Eurozone Inflation

In November, the Eurozone’s annual rate of inflation accelerated from 4.1% to 4.9%, which was in line with forecasts. The core annual rate of inflation picked up from 2.0% to 2.6%, which was also in line with forecasts.

From the U.S

There were no major stats from the U.S to provide the European majors with direction on the day.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Friday. Daimler and Volkswagen led the way down, with losses of 3.60% and 3.81% respectively, with BMW sliding by 3.38%. Continental ended the day down by a more modest 1.46%.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank fell by 1.40% and by 2.33% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole fell by 1.39% and by 1.59% respectively, with Soc Gen sliding 2.25%.

The French auto sector also struggled. Stellantis NV and Renault ended the day down by 2.61% and by 1.30% respectively.

Air France-KLM and Airbus SE bucked the trend, however, rising by 1.76% and by 1.70% respectively.

On the VIX Index

It was a 2^nd consecutive day in the green for the  VIX on Friday.

Following a 6.64% gain on Thursday, the VIX rose by 4.86% to end the day at 21.57.

The NASDAQ slid by 2.95%, with the Dow and the S&P500 falling by 1.48% and by 1.03% respectively.

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone’s economic calendar. There are no material stats from the Eurozone to provide the majors with direction. From the U.S, there are also no stats to consider, leaving the majors in the hands of any central bank chatter and COVID-19 news updates.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 121 points, with the DAX down 157 points.