European Equities: Eurozone Inflation and Central Bank Chatter in Focus
Wednesday, 17th November
Eurozone Core CPI (YoY) (Oct) Final
Eurozone CPI (YoY) (Oct) Final
Eurozone CPI (MoM) (Oct) Final
Friday, 19th November
German PPI (MoM) (Oct)
It was a relatively bullish day for the European majors on Tuesday.
The DAX30 rose by 0.61% to lead the way, with the CAC40 and the EuroStoxx600 gaining 0.34% and 0.24% respectively.
Key stats from the Eurozone and the U.S provided direction throughout the session.
Ahead of the European open, upward moves across the U.S futures provided support going into the open.
Eurozone Economic Growth
In the 3rd quarter, the Eurozone economy grew by 2.2%, which was in line with prelim figures quarter-on-quarter. Year-on-year, the Eurozone economy expanded by 3.7%, which was also in line with prelim figures.
According to Eurostat,
- GDP had grown by 2.1% in the euro area in the previous quarter.
- The number of employed persons increased by 0.9% in the 3rd quarter of 2021.
- In the previous quarter, the number of employed had risen by 0.7%.
Member State Inflation
In October, French consumer prices increased by 0.4%, month-on-month, which was in line with prelim figures. Consumer prices had fallen by 0.2% in September.
France’s annual rate of inflation accelerated from 2.2% to 2.6% in October, which was also in line with prelim figures.
In Italy, consumer prices rose by 0.7%, which was up from a prelim 0.6%. Consumer prices had fallen by 0.2% in September.
From the U.S
Retail sales were in focus amidst market angst over inflation.
In October, retail sales increased by 1.7% month-on-month versus a forecasted 0.9% rise. Retail sales had risen by 0.5% in September.
Core retail sales rose by 1.7% in October versus a forecasted 1.0% increase. In September, core retail sales had risen by 0.7%.
Other stats included industrial production, import and, export price data and inventories. The numbers had a muted impact, however, with focus on retail sales on the day.
The Market Movers
For the DAX: It was a mixed day for the auto sector on Tuesday. Continental led the way, rallying by 3.52%. Daimler and Volkswagen also found support, rising by 0.46% and by 0.33% respectively. BMW bucked the trend, however, falling by 0.09%.
It was also a mixed day for the banks. Deutsche Bank increased by 0.36%, while Commerzbank fell by 0.80%.
From the CAC, it was a bearish day for the banks. BNP Paribas slid by 1.62%, with Soc Gen and Credit Agricole ending the day down by 0.13% and 0.61% respectively.
It was a bullish day for the French auto sector, however. Stellantis NV and Renault ended the day up by 1.23% and by 1.53% respectively.
Air France-KLM fell by 1.30%, while Airbus SE rose by 0.84%.
On the VIX Index
It was back into the red for the VIX on Tuesday.
Partially reversing a 1.23% rise from Monday, the VIX fell by 0.73% to end the day at 16.37.
The NASDAQ rose by 0.76%, with the Dow and the S&P500 seeing gains of 0.15% and 0.39% respectively.
The Day Ahead
It’s a relatively quiet day ahead on the Eurozone’s economic calendar. Finalized October inflation figures for the Eurozone will be in focus.
With ECB President Lagarde having given assurances of a hold on interest rates through next year, the numbers should have limited impact on the majors.
While the inflation numbers will likely have limited impact, the ECB’s Financial Stability Review will likely garner plenty of interest. According to the ECB website, the review is provisionally set for release later today.
From the U.S, housing sector data will also have a muted impact on the European majors.
Expect central bank chatter and commodity prices to influence, however.
Ahead of the European open, ECB President Lagarde is scheduled to speak once more, with the ECB’s Schnabel due to speak late in the day. FOMC member Williams is also due to deliver a speech late in the European session.
In the futures markets, at the time of writing, the Dow Mini was up by 16 points.
For a look at all of today’s economic events, check out our economic calendar.