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Bob Mason
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Economic Calendar:

Tuesday, 8th October

  • German Industrial Production (MoM) (Aug)

Thursday, 10th October

  • German Trade Balance (Aug)

Friday, 11th October

  • German CPI (MoM) (Sep) Final
  • French CPI (MoM) (Sep) Final
  • Spanish CPI (YoY) (Sep) Final
  • Spanish HICP (YoY) (Sep) Final

The Majors

It was a bullish start to the week for the European majors. The EuroStoxx600 led the way with a 0.71% gain, with the DAX30 and CAC40 rising by 0.70% and by 0.61% respectively.

The majors found further support from Friday’s U.S labor market figures, which had reported a fall in the U.S unemployment rate to 3.5%.

Economic data out of Germany continued to disappoint, with sentiment towards Brexit and U.S – China trade talks also limiting any upside.

The Stats

It was a quiet day on the Eurozone economic calendar on Monday. German factory order figures for August delivered few surprises in the early part of the day.

According to Destatis,

  • Month-on-month, factory orders fell by 0.6%, following a 2.1% slide from the previous month. Economists had forecast a decline of 0.3%.
  • Domestic orders decreased by 2.6%, while foreign orders increased by 0.9% in August, month-on-month.
  • New orders from the euro area were up by 1.5%, with new orders from other countries rising by 0.4% compared with July-19.
  • Manufacturers of intermediate goods saw new orders increase by 1.1%, while manufacturers of capital goods saw new orders fall by 1.6%.
  • For consumer goods, new orders slipped by 0.9%.
  • Year-on-year, factory orders fell by 6.7% compared with a 5% decline in July.

There were no material stats from the U.S to influence later in the session.

The Market Movers

For the DAX: It was yet another bearish day for the auto sector, with Continental sliding by 2.65%. Daimler (-0.89%), BMW (-0.21%), and Volkswagen (-0.01%) also saw red.

Bank stocks also struggled on the day, with Deutsche Bank sliding by  1.18%. Commerzbank fell by a more modest 0.5%

From the CAC, it was a bullish day for the banks. BNP Paribas led the way, rising by 0.78%. Credit Agricole and Soc Gen saw more modest gains of 0.71% and 0.51% respectively. For the autos, Renault rose by 0.28%, with Peugeot ending the day up by 0.32%.

A divergence in sentiment between Germany and France’s respective economies continued to deliver mixed results for both sectors.

On the VIX Index

The VIX Index rose by 4.81% to end the day at 17.9.

While the European majors found support from the hope that the U.S economy will avoid a recession, Trump chatter weighed on the U.S majors later in the day.

The Day Ahead

It’s a quiet day ahead on the Eurozone economic calendar. August German industrial production figures are due out ahead of the European open.

Following Monday’s factory order numbers and last week’s private sector PMI numbers, the numbers are unlikely to provide too much support to the DAX.

From the U.S, wholesale inflation figures will likely have a muted impact on the European majors later today, barring an unexpected pickup in inflationary pressures.

Outside of the numbers, we can expect Brexit chatter and sentiment towards the U.S – China trade talks to remain the key drivers on the day.

In the futures market, at the time of writing, the DAX30 was 15.5 points, with the Dow up by 22 points.

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