Economic data from Germany, COVID-19 news updates, and ECB President Lagarde will be in focus. Chatter from Capitol Hill will also need monitoring.
German GDP (Q3) Final
German IFO Business Climate Index (Nov)
ECB President Lagarde Speaks
ECB Financial Stability Review
France Jobseekers Total
GfK German Consumer Climate (Dec)
ECB Publishes Account of Monetary Policy Meeting
French Consumer Spending (MoM) (Oct)
French CPI (MoM) (Nov) Prelim
French GDP (QoQ) (Q3) Final
French HICP (MoM) (Nov) Prelim
Eurozone Consumer Confidence Final
It was a relatively bearish start to the week for the European majors on Monday. The EuroStoxx600 fell by 0.20%, with the DAX30 and the CAC40 seeing losses of 0.08% and 0.07% respectively.
Concerns over further lockdown measures to contain the COVID-19 pandemic weighed, as new COVID-19 cases continued to spike.
While November’s prelim private sector PMIs had failed to send the majors into the red early in the session, further economic stress is anticipated.
The combination of disappointing PMI numbers and the continued rise in new COVID-19 cases did the damage. Earlier in the day, clinical trial data from AstraZeneca had also failed to impress, with a 90% efficacy rate coming up short of those of Pfizer Inc. and Moderna Inc.
Talk from Pfizer Inc. of a vaccine being available in the U.S by mid-December had provided support early in the session, however.
It was a busy day on the Eurozone economic calendar. Prelim November private sector PMI numbers for France, Germany, and the Eurozone were in focus.
France’s manufacturing PMI slipped from 51.0 to 49.1, with the Services PMI falling from 46.5 to 38.0. Both PMIs fell to 6-month lows in November, according to prelim figures.
From Germany, the Manufacturing PMI fell from a 30-month high 58.0 to 57.9. The Services PMI fell from 49.5 to a 6-month low 46.2.
For the Eurozone, the Manufacturing PMI fell from a 26-month high 54.8 to 53.6, with the Services PMI declining from 46.9 to a 6-month low 41.3.
As a result of the deeper contraction in the services sector, the Eurozone’s Composite PMI fell from 50.0 to a 6-month low of 45.1.
According to the Eurozone’s prelim October Survey,
November’s prelim private sector PMIs were also in focus late in the European session.
The Manufacturing PMI rose from 53.4 to 56.7, with the services PMI increasing from 56.9 to 57.7. As a result, the composite PMI rose from 56.3 to 57.9.
According to November’s prelim survey,
For the DAX: It was another mixed day for the auto sector on Monday. Continental rose by 2.27% to lead the way, with BMW and Daimler seeing gains of 0.47% and 1.32% respectively. Volkswagen fell by 0.69%, however, to buck the trend on the day.
It was a bullish day for the banks. Deutsche Bank rose by 3.82%, with Commerzbank rallying by 5.54%.
From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen rose by 1.32% and by 2.41% respectively. Credit Agricole jumped by 4.07%, however, to lead the way.
It was a mixed day for the French auto sector. Peugeot fell by 0.54%, while Renault ended the day up by 4.28%.
Air France-KLM rallied by 5.37%, while Airbus SE saw a more modest 1.69% gain.
It was back into the red for the VIX on Monday. Reversing a 2.55% gain from Friday, the VIX fell by 4.39% to end the day at 22.66.
Talk of Pfizer Inc. delivering a vaccine by mid-December and upbeat private sector PMI numbers from the U.S delivered support.
The upside came in spite of a continued rise in new COVID-19 cases and the latest round of containment measures.
On Monday, the Dow rose by 1.12%, with the NASDAQ and S&P500 seeing gains of 0.22% and 0.56% respectively.
It’s a relatively busy day ahead on the Eurozone economic calendar. Finalized 3rd quarter GDP and IFO Business Climate figures for November are due out of Germany.
With the Eurozone economy at the mercy of the COVID-19 2nd wave, the business climate figure will likely have the greatest impact.
On the monetary policy front, ECB President Draghi is also scheduled to speak late in the session. Any forward guidance on monetary policy will influence.
From the U.S, consumer confidence for November will also provide direction late in the day.
Away from the economic calendar, COVID-19 news updates and any chatter from Capitol Hill will need monitoring.
In the futures markets, at the time of writing, the Dow was up by 16 points.
For a look at all of today’s economic events, check out our economic calendar.
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.