Economic data from the U.S, COVID-19, Brexit, and Capitol Hill will provide the majors with direction on the day.
French HICP (MoM) (Oct) Final
Spanish CPI (YoY) (Oct) Final
Spanish HICP (YoY) (Oct) Final
Eurozone GDP (YoY) (Q3) 2nd Estimate
Eurozone Trade Balance (Sep)
A run of 3 consecutive days in the green came to an end for the European majors on Thursday. The CAC40 and the DAX30 led the way down, with losses of 1.52% and 1.24% respectively, with the EuroStoxx600 falling by 0.88%.
After the market reaction to progress towards a COVID-19 vaccine in the 1st half of the week, concerns over COVID-19 weighed.
Lockdown measures across Eurozone member states and the continued rise in new COVID-19 cases pressured the majors.
A lack of progress towards a stimulus package on Capitol Hill amidst Trump’s refusal to concede also tested support.
It was a relatively quiet day on the Eurozone economic calendar. Key stats included Germany’s finalized inflation and Eurozone industrial production figures.
According to Destatis,
German consumer prices rose by 0.1% in October, which was in line with prelim. In September, consumer prices had fallen by 0.2%.
Compared with October 2019, the prices of goods were down by 1.5%, which was attributed to a 6.8% slump in energy products. Excluding energy products, the annual rate of inflation stood at 0.6%, while the harmonized index of consumer prices fell by 0.5%.
Industrial production fell by 0.4% in the month of September, following a revised 0.6% increase in August. Economists had forecast a 0.7% rise.
According to Eurostat,
The Economic Bulletin delivered some markets with a reality check on the day. Salient points from the minutes included:
Economic data included October inflation and weekly jobless claims figures.
In October, the annual core rate of inflation softened from 1.7% to 1.6%, with core consumer prices stalling in October.
Core consumer prices had risen by 0.2% in September.
Of greater interest, however, were the weekly jobless claims figures. Initial jobless claims fell from a revised 757k to 709k in the week ending 6th October.
For the DAX: It was another mixed day for the auto sector on Thursday. Daimler slid by 2.88% to lead the way down, with Continental and Volkswagen falling by 0.28% and by 0.46% respectively. BMW bucked the trend with a 0.09% gain.
It was a bearish day for the banks. Deutsche Bank fell by 1.02%, with Commerzbank ending the day with a 0.02% loss.
From the CAC, it was another bearish day for the banks, with BNP Paribas sliding by 3.76% to lead the way down. Credit Agricole and Soc Gen fell by 2.42% and by 2.10% respectively.
It was also a mixed day for the French auto sector. Peugeot fell by 2.20%, while Renault rose by 0.75%.
Air France-KLM saw a modest 0.63% loss, while Airbus SE slid by 2.75%.
It was just a 3rd day in the green from eleven for the VIX on Thursday. Reversing a 3.69% fall from Wednesday, the VIX rose by 8.10% to end the day at 25.35.
Negative sentiment towards the COVID-19 pandemic and reintroduction of containment measures weighed. A lack of progress towards a stimulus package was also negative for riskier assets on the day.
On Thursday, the Dow and the S&P500 fell by 1.08% and by 1.00% respectively. The NASDAQ ended the day with a more modest 0.65% loss.
It’s another relatively busy day ahead on the Eurozone economic calendar. Key stats from the Eurozone include 2nd estimate GDP and September trade figures for the Eurozone.
Finalized October inflation figures for France and Spain are also due out.
Barring a marked deviation from prelim figures, however, the stats are unlikely to have too much influence. We also expect trade data for the Eurozone to also have a muted impact on the markets.
From the U.S, prelim Consumer Sentiment figures for November will likely garner some interest late in the session, however.
Away from the economic calendar, Brexit and COVID-19 news updates, and U.S politics will continue to need monitoring.
In the futures markets, at the time of writing, the Dow was up by 48 points, while the DAX was down by 78.5 points.
For a look at all of today’s economic events, check out our economic calendar.
With over 28 years of experience in the financial industry, Bob has worked with various global rating agencies and multinational banks. Currently he is covering currencies, commodities, alternative asset classes and global equities, focusing mostly on European and Asian markets.