European Equities: Economic Data from the Eurozone and U.S Nonfarm Payrolls in Focus

Mixed economic data from the Eurozone and member states limited the upside on the day, however.

The Stats

Finalized services and composite PMIs were also out from France, Germany, and the Eurozone.

German Factory Orders

In September, German factory orders increased by 1.3%, partially reversing an 8.8% tumble from August. Economists had forecast a 2.0% rise.

According to Destatis,

• New orders in the manufacture of machinery and equipment surged by 12.2%.
• There was also a 9.6% jump in new orders in the manufacture of motor vehicles, trailers, and semi-trailers.
• Compared with Feb-2020, the month before COVID-19 restrictions, new orders were up 8.6%.
• Domestic orders were down 5.9%, month-on-month, while foreign orders were up 6.3%.
• New orders from the euro area fell by 7.3%, while new orders from other countries supported with a 14.9% jump (excl. major orders).

Member State PMIs

The Spanish Services PMI slipped from 56.9 to 56.6 versus a forecasted 55.8. For Italy, the services PMI slid from 55.5 to 52.4 versus a forecasted increase to 56.6.

In October, the French Services PMI rose from 56.2 to 56.6, which was in line with prelim.

By contrast, the German services PMI slid from 56.2 to 52.4, which was also in line with prelim.

The Eurozone

As a result of the mixed results, the Eurozone’s Services PMI fell from 56.4 to 54.6. The Eurozone’s Composite PMI declined from 56.2 to 54.2, which was down from a prelim 54.3.

According to the Eurozone Markit Survey,

• Expansions in the manufacturing and services sector cooled at the start of the final quarter.
• Growth at goods producers slowed to a particularly notable degree, easing to the weakest since the July recovery began.
• Service sector growth also softened, with the rate of growth falling to a 6-month low.
• Supply-side constraints were a major headwind in October and also fueled inflationary pressures.
• Both input costs and output prices rose at record rates

Country ranking

Ireland ranked 1^st, with a 2-month high composite 62.5. Spain ranked 2^nd, with a 6-month low composite of 56.2.

Both France (54.7) and Italy (54.2) also had 6-month low composites.

Sitting at the bottom of the table, however, was Germany. In October, Germany’s Composite fell to an 8-month low 52.0.

From the U.S

In the week ending 29^th October, initial jobless claims fell from 283k to 269k.

Other stats included trade data and unit labor cost and productivity figures that had a muted impact on the majors.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Thursday. Volkswagen rose by 1.54%, partially recovering from a 4.67% slide on Wednesday. BMW (+0.27%) and Daimler (0.21%) also found support, while Continental fell by 0.73%.

It was also a mixed day for the banks. Deutsche Bank slid by 3.75%, while Commerzbank ended the day up by 1.54%, supported by positive earnings.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole fell by 1.34% and by 1.32% respectively. Soc Gen found support from its latest earnings, however, rising by 1.02%.

It was a bullish day for the French auto sector. Stellantis NV and Renault ended the day with gains of 0.52% and 1.49% respectively.

Air France-KLM rallied by 4.48%, with Airbus SE rising by 0.93%.

On the VIX Index

It was back into the green for the  VIX on Thursday.

Partially reversing a 5.80% fall on Wednesday, the VIX rose by 2.25% to end the day at 15.44.

The Dow fell by 0.09%, while the NASDAQ and the S&P500 ended the day up by 0.81% and by 0.42% respectively.

The Day Ahead

It’s a quieter day ahead on the Eurozone’s economic calendar. German industrial production and Eurozone retail sales figures are due out along with German construction and French nonfarm payrolls.

Expect the industrial production and retail sales figures to provide direction.

Later in the day, however, U.S nonfarm payrolls from the U.S will be the key numbers on the day.

Away from the economic calendar, corporate earnings will also continue to influence.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 8 points.

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