European Equities: Economic Data Will Need to Impress…With the futures markets signaling red, the Eurozone economic calendar will need to provide support later today.
Wednesday, 6th November
- German Factory Orders (MoM) (Sep)
- Spanish Services PMI (Oct)
- Italian Services PMI (Oct)
- French Services PMI (Oct) Final
- German Services PMI (Oct) Final
- Eurozone Markit Composite PMI (Oct) Final
- Eurozone Services PMI (Oct) Final
- Eurozone Retail Sales (MoM) (Sep)
Thursday, 7th November
- German Industrial Production (MoM) (Sep)
- ECB Economic Bulletin
Friday, 8th November
- German Trade Balance (Sep)
- French Non-Farm Payrolls (QoQ) (Q3)
It was another day in the green for the European majors on Tuesday, with the CAC40 up by 0.39% to lead the way. The EuroStoxx600 and DAX30 saw more modest gains of 0.20% and 0.09% respectively.
With no economic data out of the Eurozone to provide direction, positive sentiment towards the U.S – China trade talks continued to provide support.
It was a quiet day on the Eurozone economic calendar on Tuesday. There were no material stats due out of the Eurozone to provide direction to the majors with direction.
A lack of stats left the European majors in the hands of corporate earnings, economic data out of the U.S and geopolitical risk on the day.
Economic data from the U.S included finalized October service and Composite PMIs, September JOLTs job openings and the market’s preferred ISM Non-Manufacturing PMI for October.
The market’s preferred ISM numbers showed that service sector activity picked up in October. The ISM non-manufacturing PMI rose from 52.6 to 54.7, which was market positive. The rise in October was in contrast to the less influential Markit survey figures that showed service sector activity grow at a slower pace. The Markit Service PMI fell from 50.9 to 50.6 in October.
A fall in JOLTs job openings in September and a narrowing in the U.S trade deficit had a muted impact on the European majors.
The Market Movers
For the DAX: It was another mixed day for the auto sector on Tuesday. Continental and BMW led the way, with gains of 2.05% and 1.96% respectively. Daimler also saw green, rising by 0.44%, whilst Volkswagen bucked the trend, falling by 0.19% on the day.
Banks also found support on Tuesday. Commerzbank rose by 1.23%, with Deutsche Bank up by 0.09%.
From the CAC, bank stocks also found support. Soc Gen and BNP Paribas led the way, rising by 1.52 % and by 1.34% respectively, with Credit Agricole up by 0.63%.
It was mixed for autos, however. Peugeot rose by 1.08%, while Renault fell by 0.47% on the day.
On the VIX Index
The VIX Index saw green for a second consecutive day on Tuesday, rising by 2.10%. Following on from a 4.31% gain on Monday, the VIX ended the day at 13.1.
The upside for the VIX came in spite of positively skewed data from the U.S and ongoing hopes of a partial end to the U.S – China trade war.
The Day Ahead
It’s a busy day ahead on the Eurozone economic calendar. Key stats due out of the Eurozone include German factory orders for September, October Service Sector PMIs out of Spain and Italy and Eurozone retail sales figures for September. The Eurozone’s finalized service and composite will also provide direction.
Barring material deviation from prelims, finalized French and German service sector PMIs will unlikely to have an influence on the day.
Corporate earnings and geopolitical risk will continue to provide direction throughout the day.
From the U.S, 3rd quarter unit labor costs and nonfarm productivity numbers will likely have a muted impact on the majors.
In the futures market, at the time of writing, the DAX30 was down by 31.5 points, with the Dow down by 29 points.