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Economic Calendar:

Wednesday, 24th March

French Manufacturing PMI (Mar) Prelim

French Services PMI (Mar) Prelim

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German Manufacturing PMI (Mar) Prelim

German Services PMI (Mar) Prelim

Eurozone Manufacturing PMI (Mar) Prelim

Eurozone Markit Composite PMI (Mar) Prelim

Eurozone Services PMI (Mar) Prelim

Consumer Confidence (Mar) – Eurozone – Flash

Thursday, 25th March

GfK German Consumer Climate (Apr)

ECB Economic Bulletin

ECB President Lagarde Speaks

Friday, 26th March

Spanish GDP (QoQ) (Q4)

German Ifo Business Climate Index (Mar)

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The Majors

It was a bearish end to the week for the European majors on Friday. The DAX30 and the CAC40 fell by 1.05% and by 1.07% respectively, with the EuroStoxx600 declining by 0.82%.

With no major stats from the Eurozone or the U.S to provide the majors with direction, news of new lockdown measures weighed.

France reintroduced lockdown measures in regions of the country heavily impacted by fresh spikes in new COVID-19 cases.

Vaccination shortages in France and across the EU remain a going concern, with the French economy facing yet another uphill battle.

According to Bloomberg’s vaccination tracker, the EU has vaccinated 8.6% of its population. More importantly, only 3.7% have been fully vaccinated.

Low vaccination rates will continue to leave the EU and Eurozone economies at the mercy of the coronavirus.

The Stats

It was a relatively quiet day on the economic calendar on Friday. German wholesale inflation figures were in focus.

In February, the annual rate of wholesale inflation accelerated from 0.9% to 1.9%. Economists had forecast an annual rate of wholesale inflation of 2.0%.

Month-on-month, the producer price index rose by 0.7% in February, which was in line with forecasts. In January, the producer price index had risen by 1.4%.

According to Destatis,

  • Significant price increase on intermediate goods, especially regarding secondary raw materials and metals drove prices higher.
  • Prices of intermediate goods increased by 3.8% compared with February 2020. This was the highest year-on-year price increase since November 2017.
  • Secondary raw material prices surged by 46.6% year-on-year in February, with prices of non-ferrous metals up 11%.
  • Energy prices increased by 3.7% year-on-year and by 1.3% month-on-month. The increase was as a result of a 6.8% jump in electricity prices and the introduction of CO2 pricing in January 2021.
  • Prices of durable consumer goods increased by 1.4%, year-on-year, with prices for capital goods up 0.8%.
  • A fall in prices for pork, however, led to a fall in non-durable consumer goods prices.

From the U.S

It was a particularly quiet day, with no material stats to provide the European majors with direction.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. Volkswagen and Daimler rose by 2.25% and by 0.12% respectively, while BMW and Continental fell by 2.76% and by 0.62% respectively.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank slid by 2.24% and by 3.14% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas slid by 3.29%, with Credit Agricole and Soc Gen falling by 2.57% and by 2.81% respectively.

It was also a bearish day for the French auto sector. Stellantis NV and Renault slid by 3.57% and by 3.16% respectively.

Air France-KLM and Airbus SE also struggled, ending the day with losses of 3.04% and 3.72% respectively.

On the VIX Index

It was back into the red for the VIX on Friday, marking a 7th day in the red from 10 sessions.

Partially reversing a 12.22% gain from Thursday, the VIX fell by 2.92% to end the day at 20.95.

The NASDAQ rose by 0.76%, while the Dow and the S&P500 saw losses of 0.71% and 0.06% respectively.

The Day Ahead

It’s a quiet day ahead. There are no material stats to provide the European majors with direction.

From the U.S, hosing sector data for February are due out. These are unlikely to influence the majors late in the European session, however.

On the monetary policy front, FED Chair Powell is scheduled to speak. Following last week’s FOMC press conference and projections, however, the FED Chair would need to move from the script to impact the majors.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 78 points, with the DAX down by 51 points.

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

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