European Equities: Futures Point Northwards with no Stats to Spook the Markets

The Majors

It was a bullish start to the week for the European majors following Friday’s market closures across Europe.

The DAX30 rallied by 1.49%, with the CAC40 and the EuroStoxx600 gaining 1.20% and 0.66% respectively.

A post-Brexit trade agreement and news of Trump’s signing of the aid package and spending bill delivered support on the day.

2 key risks to riskier assets have now been removed near-term. With a no-deal Brexit averted and the U.S stimulus package delivered, EU wide vaccinations also raise the prospects of an eventual end to the COVID-19 pandemic.

COVID-19 figures will continue to draw attention near-term, however. A continued rise in new cases is likely until sufficient vaccine doses are available. this could mean further containment measures near-term.

The Stats

It was a quiet day on the economic calendar. French jobseeker figures were in focus in the early part of the European session.

In November, jobseekers rose from 3,549.7k to 3,586.3k.

From the U.S

It was also a particularly quiet day with no material stats to influence the majors.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Continental rose by 0.66% to lead the way, with Daimler and Volkswagen seeing gains of 0.58% and 0.41% respectively. BMW bucked the trend, however, falling by 0.19%.

It was also a mixed day for the banks. Deutsche Bank rallied by 2.49%, while Commerzbank slipped by 0.04% on the day.

From the CAC, it was a bearish day for the banks. BNP Paribas fell by 0.38%, with Credit Agricole and Soc Gen seeing losses of 0.67% and 0.59% respectively.

It was also a bearish day for the French auto sector. Peugeot fell by 0.35%, with Renault sliding by 1.34%

Air France-KLM bucked the trend, rallying by 3.15%, while Airbus SE slipped by 0.07%.

On the VIX Index

A run of 3 consecutive days in the red came to an end for the VIX on Monday, logging just a 2^nd day in the green from 9. Partially reversing a 7.64% fall on Thursday, the VIX rose by 0.79% to end the day at 21.70.

For the VIX, the upside came in spite of the U.S majors closing out the day in positive territory. COVID-19 and concerns over the pace of any economic recovery likely supported the VIX on the day.

The NASDAQ and S&P500 rose by 0.74% and by 0.87% respectively, with the Dow gaining a more modest 0.68%.

On the day, news of Trump signing of the pandemic aid and spending bill on Sunday delivered support to the majors.

While the majors found stimulus support, continued concerns over the COVID-19 pandemic limited the upside.

In the U.S, the total number of COVID-19 cases stood at 19,642,782 at the time of writing. This is expected to spike over the holiday period. With high-priority groups currently receiving the vaccine, the risk of further containment measures therefore remains.

The Day Ahead

It’s a particularly quiet day ahead on the economic calendar. There are no material stats to provide the European majors with direction.

From the U.S, economic data is limited to house price figures that will likely have a muted impact on the majors.

The lack of stats will leave the major in the hands of COVID-19 news updates and chatter from Capitol Hill. Barring any major spikes on the day, further upside could be on the cards, however.

Overnight, lawmakers voted in favor of $2,000 pandemic relief checks, leaving it to the Senate to decide its fate.

A conclusion to the Brexit saga and expectations of yet more stimulus to drive the U.S economic recovery remain positives. Progress towards vaccinating high priority groups across the EU and the U.S is also market positive.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 99 points, with the DAX up by 26 points.

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