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European Equities: COVID-19 News and Eurozone Consumer Confidence in Focus

By:
Bob Mason
Published: Nov 21, 2021, 21:34 UTC

It's a quiet day ahead on the economic calendar, with Eurozone consumer confidence figures due out late in the session. Through the early part of the day, COVID-19 news updates will likely influence.

Abstract financial background

In this article:

Economic Calendar

Monday, 22nd November

Eurozone Consumer Confidence (Nov) Flash

Tuesday, 23rd November

French Manufacturing PMI (Nov) Prelim

French Services PMI (Nov) Prelim

German Manufacturing PMI (Nov) Prelim

German Services PMI (Nov) Prelim

Eurozone Manufacturing PMI (Nov) Prelim

Eurozone Markit Composite PMI (Nov) Prelim

Eurozone Services PMI (Nov) Prelim

Wednesday, 24th November

German Ifo Business Climate Index (Nov)

Thursday, 25th November

German (YoY) (Q3)

GfK German Consumer Climate (Dec)

The Majors

It was a bearish end to the week for the European majors on Friday, with the EuroStoxx600 seeing red for the 2nd time in 8-sessions.

The CAC40 fell by 0.42%, with the DAX30 and the EuroStoxx600 seeing losses of 0.38% and 0.33% respectively.

A relatively quiet economic calendar left the markets in the hands of market sentiment towards inflation and COVID-19 news updates.

The downside at the end of the week came in spite of continued assurances by ECB President Lagarde of unwavering policy support.

News of Austria and other EU member states facing a renewed surge in new COVID-19 cases led to the Austrian government making a move to curb the number of rising cases.

Early in the week, Austria had imposed lockdown measures for unvaccinated people. At the end of the week, however, the government imposed a full lockdown.

Germany has also talked of new restrictions after having introduced restrictions for unvaccinated people.

The Stats

In October, Germany’s producer prices for industrial products jumped by 3.8% versus a forecasted 2.3%. The PPI had risen by 1.4% in September.

Germany’s wholesale annual rate of inflation accelerated from 14.2% to 18.4%. Economists had forecast 15.7%.

According to Destatis,

  • Energy prices as a whole were up 48.2% compared with Oct-2021 and by 12.1% compared with Sep-2021.
  • Natural gas surged by 81.4%, year-on-year and electricity by 49.6%, pushing prices higher compared with Oct-2020.
  • Excluding energy, the index was up 9.2% on Oct-2020.
  • Prices of intermediate goods increased 18.1% compared with Oct-2020 and by 0.9% compared with Sep-2021.
  • For durable consumer goods, prices increased by 3.4% compared with Oct-2020.
  • Prices of non-durable goods increased 3.0% compared to Oct-2020 and by 0.5% month-on-month.

ECB President Lagarde

On the monetary policy front, ECB President Lagarde delivered a speech at the 31st Frankfurt European Banking Congress.

As with speeches earlier in the week the ECB President assured unwavering policy support.

See here for the content of ECB President Lagarde’s speech.

From the U.S

There were no material stats to provide the majors with direction later in the European session.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Friday. Volkswagen slid by 2.59%, with Continental ending the day down by 1.38%. Daimler and BMW saw relatively modest losses of 1.05% and 0.87% respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank ended the day down by 4.62% and by 3.77% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas slid by 3.02%, with Soc Gen and Credit Agricole falling by 2.53% and by 1.36% respectively.

The French auto sector also struggled. Stellantis NV and Renault ended the day with losses of 2.51% and 3.94% respectively.

Air France-KLM fell by 1.15%, with Airbus SE sliding by 3.41%.

On the VIX Index

It was a 3rd consecutive day in the green for the  VIX on Friday.

Following a 2.81% gain on Thursday, the VIX rose by 1.82% to end the day at 17.91.

The NASDAQ rose by 0.40%, while the Dow and the S&P500 saw losses of 0.75% and 0.14% respectively.

VIX 221121 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone’s economic calendar. Flash Eurozone consumer confidence figures for November will be in focus late in the European session.

While we can expect the numbers to influence, COVID-19 news updates from the EU will likely be key, however.

Following news of Austria reintroducing lockdown measures, similar moves by other member states would test support on the day.

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

About the Author

Bob Masonauthor

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.

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