European Equities: A Quiet Economic Calendar Puts U.S Inflation in Focus

The Majors

It was a bearish day for the European majors, with the EuroStoxx600 seeing its 8-day winning streak come to an end.

The EuroStoxx600 fell by 0.22%, with the CAC40 and the DAX30 ending the day down by 0.06% and by 0.04% respectively.

Disappointing trade data from Germany pegged back the DAX30 through the early part of the day.

Later in the session, better than expected ZEW economic sentiment figures failed to deliver fresh record highs ahead of the ECB forecasts on Thursday.

Wholesale inflation figures from the U.S also pegged the majors back, with cost pressures showing no sign of abating.

On the monetary policy front, ECB President Lagarde and FED Chair Powell were also delivering scheduled speeches. There were no comments, however, to cause a move across the majors on the day.

The Stats

German trade data was in focus ahead of ZEW Economic Sentiment figures for Germany and the Eurozone.

German Trade

In September, Germany’s trade surplus widened from €13.0bn to €13.2bn versus a forecasted €13.6bn.

According to Destatis,

• Exports fell by a further 0.7%, month-on-month, after having declined by 0.8% in August. Year-on-year, exports were up 7.1%.
• Imports rose by a modest 0.1% after having increased by 2.1% in August. Compared with the same month a year earlier imports were up 12.9%.

Trade with EU countries

• Compared with Sept-2020, exports to EU countries rose by 9.2%, while imports increased by 9.4%.

Trade with euro area countries

• German exports to euro area countries increased by 9.2% when compared with Sept-2020.
• Imports from euro area countries rose by 11.9%.

Trade with EU countries outside of the euro area

• Exports to EU countries outside of the euro area increased by 9.4% when compared with Sept-2020.
• Imports from EU countries out of the euro area rose by 4.5%.

Trade with non-EU countries

• Exports to third countries increased by 4.7%, when compared with Sept-2020.
• Imports from third countries jumped by 17.1%.

Economic Sentiment

In November, Germany’s ZEW Economic Sentiment Index jumped from 22.3 to 31.7 versus a forecasted decline to 20.0.

The outlook was in stark contrast to sentiment towards current conditions. Germany’s ZEW Current Conditions Index slid from 21.6 to 12.5 in November. Economists had forecast a fall to 18.0.

For the Eurozone, the Economic Sentiment Index rose from 21.0 to 25.9.

From the U.S

Wholesale inflation figures were in focus late in the session.

In October, the core producer price index rose by 0.4% after having increased by 0.2% in September. The producer price index rose by 0.6% following a 0.5% increase in September.

Economists had forecast the core PPI to rise by 0.5% and for the PPI to increase by 0.6%.

The annual core rate of wholesale inflation held steady at 6.8%, which was in line with forecasts.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. Volkswagen fell by 1.03% to lead the way down, with, BMW and Daimler seeing losses of 0.78% and by 0.12% respectively. Continental bucked the trend, however, rallying by 3.06%.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 1.74% and by 1.60% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole fell by 0.88% and by 0.92% respectively, with Soc Gen down by 0.97%.

It was also a mixed day for the French auto sector. Stellantis NV fell by 0.33%, while Renault ended the day up by 3.79% supported by a positive outlook from Nissan.

Air France-KLM fell by 2.07%, while Airbus SE rose by 0.59%.

On the VIX Index

It was a 4^th consecutive day in the green for the  VIX on Tuesday.

Following a 4.49% gain on Monday, the VIX rose by 3.48% to end the day at 17.82.

The NASDAQ fell by 0.60%, with the Dow and the S&P500 ending the day down by 0.31% and by 0.35% respectively.