With the U.S markets closed, the focus will be on Brexit, economic data from Germany, and the ECB monetary policy meeting minutes.
GfK German Consumer Climate (Dec)
ECB Publishes Account of Monetary Policy Meeting
French Consumer Spending (MoM) (Oct)
French CPI (MoM) (Nov) Prelim
French GDP (QoQ) (Q3) Final
French HICP (MoM) (Nov) Prelim
Eurozone Consumer Confidence Final
It was a mixed day for the European majors on Wednesday. The CAC40 rose by 0.23%, while the DAX30 and the EuroStoxx600 slipped by 0.02% and by 0.08% respectively.
A planned easing of containment measures provided support to the European majors on the day. While Germany will reportedly allow gatherings for Christmas, France will begin to ease lockdown measures this weekend. The more aggressive plans to ease containment measures in France delivered the upside for the CAC40.
From the U.S, a continued surge in new COVID-19 cases and disappointing economic data weighed on the day, however.
It was a quiet day on the Eurozone economic calendar. French jobseeker figures were in focus in the early part of the session.
In October, the total number of jobseekers decreased from 3,606.3k to 3,549.7k. Coupled with progress towards a COVID-19 vaccine, the numbers supported the CAC40.
From the ECB, the Financial Stability Review also failed to move the dial.
Salient points from the review included:
It was a particularly busy day on the economic data front. Key stats included the weekly jobless claims, core durable goods, 3rd quarter GDP, and personal spending figures.
In the 3rd quarter, the economy expanded by 33.1%, according to the 2nd estimate figures. This was in line with the 1st estimate while coming up short of a forecasted 33.2%.
Core durable goods orders rose by 1.3% in October, following a 1.5% increase in September. Economists had forecast a 0.5% rise.
Personal spending followed a 1.2% increase in September with a 0.5% rise in October. Economists had forecast a 0.4% rise.
On the employment front, initial jobless claims stood at 778k in the week ending 20th November. This was up from the week prior’s 742k and was another signal that the labor market recovery was stalling.
From the FED, the FOMC meeting minutes were released after the European close, which was focused heavily on the effects of the COVID-19 pandemic.
Salient points from the Committee Policy Action section included:
For the DAX: It was a bearish day for the auto sector on Wednesday. Volkswagen slid by 2.43% to lead the way down, with BMW and Daimler seeing losses of 1.69% and 1.24% respectively. Continental ended the day down by a more modest 0.46%.
It was also a bearish day for the banks. Deutsche Bank fell by 1.06%, with Commerzbank sliding by 2.85%.
From the CAC, it was a relatively bullish day for the banks. Credit Agricole and Soc Gen rose by 0.53% and by 0.93% respectively. BNP Paribas eked out a 0.05% gain on the day.
It was also a bullish day for the French auto sector. Peugeot and Renault ended the day with gains of 0.63% and 0.22% respectively.
Air France-KLM followed Tuesday’s 11.07% surge with a 2.1% gain, while Airbus SE slid by 2.14%.
It was a 3rd consecutive day in the red for the VIX on Wednesday. Following a 4.50% decline on Tuesday, the VIX fell by 1.80% to end the day at 21.25.
The downside for the VIX came in spite of the Dow and S&P500 seeing red on Wednesday. Disappointing economic data from the U.S left the pair in the red for the day.
On Wednesday, the Dow and S&P500 fell by 0.58% and by 0.16% respectively, while the NASDAQ rose by 0.48%.
It’s a relatively quiet day ahead on the Eurozone economic calendar. German GfK Consumer Climate figures for December are due out later this morning.
With progress towards a COVID-19 vaccine, however, the DAX30 will likely be resilient to today’s numbers.
From the ECB, the ECB monetary policy meeting minutes will draw interest later in the day, however.
With the ECB assuring more support next month, the markets will be looking for some guidance on what to expect.
From the U.S, there are no material stats, with the U.S markets closed for Thanksgiving.
Away from the economic calendar, expect COVID-19 news updates and Brexit to also influence.
In the futures markets, at the time of writing, the DAX was down by 0.50 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.