European Equities: China Data and Brexit Angst to Set the Tone

3rd quarter GDP numbers out of China will set the tone for the day, as the markets look ahead to tomorrow’s Brexit vote…
Bob Mason
Smart city and global network concept. IoT(Internet of Things). ICT(Information Communication Technology).

The Majors

It was a day in the red for the majors on Thursday. The CAC40 led the way down, falling by 0.42%, while the DAX30 and EuroStoxx600 slipped by just 0.12% and by 0.10% respectively.

With no material stats from the Eurozone to provide direction, news updates on Brexit provided direction on the day.

A last-minute draft deal was delivered to and approved by the EU, which now requires ratification with a parliamentary vote.

For Boris Johnson and the Brexiteers, the loss of the Democratic Unionist Party’s support was a blow ahead of tomorrow’s parliamentary vote. As things stand, there’s no clear indication of which way the vote can go.

The Stats

It was a quiet day on the Eurozone economic calendar on Thursday. There were no stats from the Eurozone to provide the majors with direction.

From the U.S, however, stats were on the heavier side and influenced late on in the day.

Key stats from the U.S included October’s Philly FED Manufacturing Index figures and August industrial production numbers.

The Philly FED Manufacturing Index disappointed, falling from 12.0 to 5.6 in October. Economists had forecast a fall to 7.3.

In September, industrial production also disappointed, with production falling by 0.4%, which worse than a forecasted rise of 0.1%. In August, production had risen by 0.6%.

The Market Movers

For the DAX: It was a day in the red for the auto sector. Daimler led the day down, falling by 1.16%. Volkswagen and Continental weren’t far behind, with losses of 0.72% and 0.71% respectively. BMW saw a more modest loss of 0.16%.

It was a mixed day for the bank. Deutsche Bank rose by 0.38%, while Commerzbank slipped by 0.07%

From the CAC, it was also a mixed day for the banks. Soc Gen bucked the trend on the day, rising by 0.19%. Credit Agricole and BNP Paribas saw red, however, with losses of 0.82% and 0.57% respectively. For the autos, it was also mixed with Renault falling by 0.47%, while Peugeot gained 1.31%.

On the VIX Index

The VIX Index saw green for a 2nd consecutive day on Thursday, rising by 0.8%. Following on from a 1.03% gain on Wednesday, the VIX ended the day at 13.8.

Disappointing economic data from the U.S and negative sentiment towards Brexit provided support on the day. News of a U.S – China trade deal being drafted for President Trump and Premier Xi’s review limited the upside, however.

The Day Ahead

It’s another quiet day ahead on the Eurozone economic calendar. There are no material stats due out of the Eurozone to provide direction.

A lack of stats will continue to leave the majors in the hands of Brexit updates, with no material stats due out of the U.S.

Early this morning, economic data out of China will set the tone ahead of tomorrow’s key Parliamentary vote on Brexit.

3rd quarter GDP numbers are due out of China along with September retail sales and industrial production figures.

In the futures market, at the time of writing, the DAX30 was down by 23.5 points, while the Dow was up by 9 points.

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