Updates on Brexit and U.S stimulus talks to drive the majors, with economic data on the lighter side.
Eurozone Consumer Confidence (Dec) Flash
GfK German Consumer Climate (Jan)
It was a bearish end to the week for the European majors on Friday. The CAC40 and EuroStoxx600 fell by 0.35% and by 0.39% respectively, with the DAX30 seeing a modest 0.27% loss.
A lack of progress towards a Brexit deal and failure by U.S lawmakers to deliver a stimulus package weighed on risk appetite.
The downside came in spite of positive economic data from Germany on the day, with renewed lockdown measures offsetting the positive numbers.
It was a relatively quiet day on the economic calendar. Germany’s IFO Business Climate Index figures were in focus in the early part of the session.
The headline Business Climate Index rose from 90.90 to 92.10 in December. Also positive were an increase in the current assessment sub-index from 90.0 to 91.3 and a rise in the business expectations sub-index from 91.8 to 92.8.
According to the December survey,
By Sector:
The trade and construction sectors delivered mixed results, however. While the Business Climate Index for the trade sector rose from -4.0 to +0.3, the index for the construction sector remained unchanged at -0.5. Increased pessimism across the construction sector offset an improved assessment of the current situation.
It was a quiet day on the economic calendar. Key stats included current account figures that had a muted impact on the majors.
For the DAX: It was a mixed day for the auto sector on Friday. Continental rallied by 2.54%, with BMW and Daimler seeing gains of 0.14% and 0.26% respectively. Volkswagen bucked the trend on the day, however, falling by 1.04%.
It was a bearish day for the banks, however. Deutsche Bank fell by 0.80%, with Commerzbank ending the day with a modest 0.15% loss.
From the CAC, it was a bearish day for the banks. BNP Paribas and Soc Gen fell by 1.09% and by 0.99% respectively. Credit Agricole led the way down, however, with a 1.81% loss.
It was yet another mixed day for the French auto sector. Peugeot rose by 0.63%, while Renault fell by 1.15%.
Air France-KLM slid by a further 2.45%, with Airbus SE declining by 1.53%.
It was a 4th consecutive day in the red for the VIX on Friday. Following on from a 2.53% fall on Thursday, the VIX fell by 1.64% to end the day at 21.57.
The downside in the VIX came in spite of a pullback in the U.S equity markets on the day.
A lack of progress towards a COVID-19 stimulus package weighed on risk appetite at the end of the week.
The Dow and S&P500 fell by 0.41% and by 0.35% respectively, with the NASDAQ falling by a more modest 0.07% on the day.
It’s a quiet day ahead on the economic calendar. Flash consumer confidence figures for the Eurozone are due out late in the session.
While the consumer confidence figures will influence, updates on Brexit and news from Capitol Hill will be key drivers on the day.
A lack of progress from the weekend towards a Brexit deal and a stimulus package will likely weigh on the majors going into the open.
In the futures markets, at the time of writing, the DAX was down by 166 points, while the Dow Mini was up by 59 points.
For a look at all of today’s economic events, check out our economic calendar.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.