European Equities: Economic Data and the ECB in Focus

How the ECB responds to inflationary pressures, previously considered transitory, has also left the markets on unsteady ground.

According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August…

The Stats

French non-farm payrolls were in focus early in the session.

In the 2^nd quarter, non-farm payrolls increased by 1.1% quarter-on-quarter. In the previous quarter, payrolls had risen by 1.2%.

From the U.S

JOLT’s job openings were in focus late in the European session.

In July, job openings jumped from 10.185m to 10.934m in July, coming in well ahead of a forecasted 10.000m.

The numbers failed to change the mood, however.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. Volkswagen slid by 3.05% to lead the way, with Daimler ending the day down by 2.44%. BMW and Continental both fell by 2.35% respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank saw losses of 0.46% and 2.35% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole fell by 1.53% and by 1.29% respectively, with Soc Gen ending the day down by 2.11%.

Things were not much better for the French auto sector. Stellantis NV slid by 2.86%, with Renault falling by 0.82%.

Air France-KLM bucked the trend, rising by 0.64%, while Airbus SE fell by 0.33%.

On the VIX Index

It was back into the red the VIX on Wednesday.

Following a 10.54% jump on Tuesday, the VIX fell by 0.99% to end the day at 17.96.

On Tuesday, the NASDAQ declined by 0.57%, with the Dow and S&P500 ending the day down by 0.20% and by 0.13% respectively.

The Day Ahead

It’s a busier day ahead on the Eurozone’s economic calendar.

Trade data from Germany will draw interest in the early part of the session. While we can expect market sensitivity to the numbers, the ECB will be the main area of focus on the day.

Later in the day, the ECB will deliver its 1^st policy decision of the final quarter of the year. While the markets are expecting tapering to the asset purchasing program, there is some uncertainty over other policy measures.

There’s been plenty of hawkish chatter amidst persistent inflationary pressure. Economic uncertainty remains as a result of the Delta variant, however.

From the U.S, jobless claims will also influence, though the release coincides with Lagarde’s press conference.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 12 points.

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