European Equities: Brexit, COVID-19 Vaccine Updates, and Economic Data in Focus

Italy’s Services PMI decreased from 46.7 to 39.4, which was worse than a forecasted decline to 41.3.

The finalized French PMI came in at 38.8, which was up from a prelim 38.0, while Germany’s came in at 46.0. This was down from a prelim 46.2. In October, the PMIs had stood at 46.5 and 49.5 respectively.

For the Eurozone, the services PMI came in at 41.7, which was up from a prelim 41.3, while down from an October 46.9.

The Eurozone’s composite PMI came in at 45.3, which was up from a prelim 45.1. In October, the PMI had stood at 50.0.

Retail Sales

Eurozone retail sales rose by 1.5% in October, reversing a 1.7% decline from September. The numbers had a muted impact on the majors, however, with member states having reintroduced containment measures in November.

From the U.S

Economic data was also on the busier side. Key stats included October’s ISM Services PMI and the weekly jobless change figures.

The ISM Services PMI fell from 56.6 to 55.9 in November. Economists had forecast a fall to 56.0.

In the week ending 27^th November, U.S initial jobless claims came in at 712k, which was down from a previous week 787K. Economists had forecast initial jobless claims of 775k. While the decline was positive for the markets, jobless claims continue to sit at unprecedented levels in spite of the reopening of the U.S economy.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. Continental and Daimler fell by 0.94% and by 1.20% respectively to lead the way down. BMW and Volkswagen saw more modest losses of 0.27% and 0.18% respectively.

It was a bullish day for the banks, however. Deutsche Bank rose by 1.46%, with Commerzbank gaining a more modest 0.33%.

From the CAC, it was a mixed day for the banks. Credit Agricole and Soc Gen saw gains of 2.41% and 0.73%, while BNP Paribas fell by 0.17%.

It was also a mixed day for the French auto sector. Peugeot rose by 0.15%, while Renault slipped by 0.14%.

Air France-KLM continued its recovery, rising by 2.93%, with Airbus SE rallying by 4.03% on the day.

On the VIX Index

It was a 3^rd consecutive day in the green for the VIX, after having fallen for 5 consecutive days. Following on from Wednesday’s 1.93% gain, the VIX rose by 0.52% to end the day at 21.28.

Disappointing economic data from the U.S and sentiment towards the near-term economic outlook supported the upside for the VIX. Progress towards a U.S stimulus package limited the upside, however.

For the U.S markets, it was a mixed day for the majors that visited record highs. The Dow and NASDAQ rose by 0.29% and by 0.23% respectively, while the S&P500 slipped by 0.06%.

The Day Ahead

It’s a quieter day ahead on the Eurozone economic calendar. Key stats include German factory orders for October and construction PMI figures for November.

Expect German factory orders to have a greater influence on the majors. With Germany’s Manufacturing PMI continuing to report growth, the factory order numbers will need to be aligned.

From the U.S, it’s a busy day ahead on the economic data front. November nonfarm payrolls and unemployment rate, due out later today, will have the greatest impact.

Other stats due out of the U.S include wage growth, nonfarm productivity and unit labor costs, trade data, and factory orders.

Barring particularly dire numbers, expect the focus to remain on the nonfarm payroll figures and the unemployment rate.

Away from the economic calendar, Brexit and COVID-19 news updates will likely remain the key areas of focus. Progress towards a stimulus package on Capitol Hill should provide support going into the open.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 33 points.

For a look at all of today’s economic events, check out our economic calendar.