European Equities: German Business Sentiment and U.S Economic Data in Focus

France’s manufacturing PMI rose from 53.6 to 54.6 in November, with the services PMI up from 56.6 to 58.2.

In Germany, the manufacturing sector PMI slipped from 57.8 to 57.6, while the services PMI rose from 52.4 to 53.4.

For the Eurozone, the manufacturing PMI rose from 58.3 to a 2-month high 58.6, with the services PMI increasing from 54.6 to 6-month high 56.6.

As a result, the Composite PMI increased from 54.2 to 2-month high 55.8

According to the Eurozone’s prelim November survey:

• A pickup in private sector activity from October’s 6-month low, was accompanied by a further marked increase in inflationary pressures.
• Firms’ costs and average selling prices charged for goods and services both rose at record rates.
• Although the rate of job creation rose to the 2^nd highest in over 21-years to meet demand, optimism waned.
• Renewed COVID-19 worries and lingering supply constraints left optimism at a 10-month low.

From the U.S

Private sector PMIs were also in focus.

In November, the services PMI fell from 58.7 to 57.0, while the manufacturing PMI increased from 58.4 to 59.1. Economists had forecast for both PMIs to increase to 59.0.

As a result, the Composite PMI fell from 57.6 to 56.5.

According to the prelim November survey,

• New business growth remained strong, with the rate of growth in line with the historical average
• Both sectors saw a pickup in orders from overseas, with new export business returning to growth.
• Outstanding new business increased at the second-most marked rate on record, down slightly from October’s series high.
• Backlogs were on the rise as a result of severe supply chain delays and labor shortages.
• The rate of job creation was solid, however.
• In November, the rate of input price inflation reached a new series high.
• The pace of selling price inflation matched October’s series record high.
• In spite of this, business confidence improved, supported by strong client demand, further easing of COVID-19 restrictions, and new business.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Tuesday. Daimler and Volkswagen fell by 0.99% and by 0.81% respectively. BMW and Continental ended the day with relatively modest losses of 0.50% and 0.57% respectively.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank rose by 2.21% and by 1.29% respectively.

From the CAC, it was a mixed day for the banks. BNP Paribas rose by 0.43%, while Credit Agricole and Soc Gen saw losses of 0.75% and 0.05% respectively.

The French auto sector struggled, however. Stellantis NV slid by 2.48%, with Renault ended the day down by 1.76%.

Air France-KLM and Airbus SE ended the day up by 0.52% and by 1.36% respectively, however.

On the VIX Index

It was a 5^th consecutive day in the green for the  VIX on Tuesday

Following a 7.04% gain on Monday, the VIX rose by 1.10% to end the day at 19.38.

The NASDAQ slipped by 0.50%, while the Dow and the S&P500 saw gains of 0.55% and 0.17% respectively.

The Day Ahead

It’s a relatively busy day ahead on the Eurozone’s economic calendar. Germany’s IFO Business Sentiment figures for November will be in focus early in the session.

With new COVID-19 cases on the rise, a fall in sentiment would test support for the majors.

Later in the day, however, key stats from the U.S will likely have a greater impact on the European markets.

3^rd quarter GDP, personal spending, core durable goods, and inflation figures will be in focus ahead of Thursday’s U.S Thanksgiving holiday.

Away from the economic calendar, downside risks remain should news hit the wires of other EU member states having to impose COVID-19 lockdown measures.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 27 points.

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