European Equities: Another Busy Economic Calender to Provide Direction

The Majors

It was a bullish start to the year for the European majors, with the CAC40 and DAX30 rising by 0.90% and by 0.86% respectively. The EuroStoxx600 ended the day up by 0.45%.

A busy economic calendar distracted the markets from COVID-19 stats from the weekend. A continued rise in new cases failed to raise question markets over the resilience over the economic recovery. PMI numbers from the Eurozone provided strong support, with sub-components of the PMIs also market positive.

Away from the economic calendar, continued reports of the Omicron strain being milder was key to the bullish start.

The Stats

Manufacturing PMI figures for Italy and Spain were in focus. Finalized manufacturing PMIs for France, Germany, and the Eurozone also drew interest, however.

Member State Manufacturing PMIs

Spain’s Manufacturing PMI fell from 57.1 to 56.2 in December, which was in line with forecasts.

In December, Italy’s Manufacturing PMI declined from 62.8 to 62.0. Economists had forecast for the PMI to fall to 61.5.

According to finalized figures:

France’s Manufacturing PMI slipped from 55.9 to 55.6, which was up from a prelim 54.9.

In November, Germany’s Manufacturing PMI held steady at 57.4, which was down from a prelim 57.9.

The Eurozone

According to finalized figures, the Eurozone’s Manufacturing PMI fell from 58.4 to a 10-month low 58.0 in December, which was in line with prelim.

According to the December survey,

• Average lead times lengthened to the softest extent since February.
• As a result of easing supply chain issues, firms added purchases to their inventories at the fastest pace ever recorded.
• In spite of this, output growth remained unchanged.
• Input cost and output price inflation eased, though remained among the fastest ever seen by the survey.
• New manufacturing orders increased at the joint-weakest rate since January as a result of weaker overseas demand.
• Rising outstanding work led to a pickup in the pace of hiring.

By Country,

• Italy ranked 1^st, with a 2-month low PMI of 62.0, followed by Greece (59.0).
• France sat at the bottom of the table with a 2-month low PMI of 55.6.
• Spain’s PMI fell to a 10-month low 56.2 to sit just above France.

From the U.S

In December, the U.S Manufacturing PMI fell from 58.3 to 57.7 versus a prelim 57.8.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Monday. BMW and Continental both ended the day up by 3.21% respectively. Daimler and Volkswagen saw more modest gains of 1.64% and 1.87% respectively.

It was also a bullish day for the banks. Deutsche Bank rose by 3.00%, with Commerzbank rallying by 4.51%.

From the CAC, it was a bullish day for the banks. BNP Paribas rose by 0.71%, with Credit Agricole and Soc Gen ending the day up by 1.50% and by 0.83% respectively.

The French auto sector also had a bullish session. Stellantis NV and Renault saw gains of 3.85% and 2.85% respectively.

Air France-KLM found much-needed support, rallying by 4.88%, with Airbus SE rising by 3.36%

On the VIX Index

It was a 2^nd consecutive day in the red for the VIX on Monday, marking an 8^th loss in 9-sessions.

Following a 0.63% decline on Friday, the VIX fell by 3.60% to end the day at 16.60.

The NASDAQ rose by 1.20%, with the Dow and the S&P500 gaining 0.68% and 0.64% respectively.