European Equities: German Factory Orders and U.S Labor Market Numbers in Focus

The Stats

It was a busy day on the Eurozone economic calendar.

Key stats included service sector PMIs for Italy and Spain and finalized PMIs for France, Germany, and the Eurozone.

Member Stats

Italy’s Services PMI fell from 58.0 to 55.5 versus a forecasted 56.5, with Spain’s down from 60.1 to 56.9. Economists had forecast a PMI of 58.0.

Finalized numbers from France and Germany also disappointed.

The French Services PMI slipped from 56.3 to 56.2, which was up from a prelim 56.0.

Germany’s Services PMI slid from 60.8 to 56.2 in September, which was up from a prelim 56.0.

The Eurozone

As a result of the better numbers from France and Germany, the Eurozone’s Services PMI fell from 59.0 to 56.4 which was up from a prelim 56.3.

In September, the Composite PMI declined from 59.0 to 56.2, which was up from a prelim 56.1.

Key takeaways from the finalized Markit Survey:

• Euro area economic growth moderated for a 2^nd consecutive month.
• There were softer rates of expansion in both new orders and employment.
• Businesses’ output expectations were the least optimistic since February.
• Significantly, inflationary trends moved higher, with input prices rising at the joint fastest pace on record.
• Output prices rose at a pace which was only surpassed by those seen in June and July.

Rankings

• Ireland ranked 1^st with a 5-month low composite of 61.5 followed by Spain (57.0).
• Italy came in 3^rd, with a 4-month low 56.6.
• Germany ranked 4^th, with a 7-month low 55.5 followed by France that sat at the bottom of the table with a 5-month low composite of 55.3.

From the U.S

Private sector PMIs and trade data were in focus, with the market’s favored ISM Non-Manufacturing PMI the key stat of the day.

In September, the ISM Non-Manufacturing PMI rose from 61.7 to 61.9.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. Continental fell by 0.66% to buck the trend on the day. Volkswagen rose by 1.02%, however, to lead the way, with BMW and Daimler both ending the day up by 0.34%.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank rallied by 3.56% and by 2.92% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen ended the day up by 4.62% and by 4.34% respectively. Credit Agricole led the way, rallying by 5.67%.

It was a mixed day for the French auto sector, however. Stellantis NV slid by 4.71%, while Renault rose by 1.36%.

Air France-KLM fell by 2.09%, while Airbus SE ended the day up by 1.25%.

On the VIX Index

It was a back into the red for the VIX on Tuesday.

Partially reversing an 8.56% rise from Monday, the VIX fell by 7.23% to end the day at 21.30.

The NASDAQ rose by 1.25 %, with the Dow and S&P500 ending the day up by 0.92% and by 1.05% respectively.

The Day Ahead

It’s a relatively busy day ahead on the Eurozone’s economic calendar. German factory orders and Eurozone retail sales will be the key stats of the day.

While consumer spending is key from an ECB perspective, factory orders will likely have greater influence amidst growth concerns.

From the U.S, ADP Nonfarm Employment Change figures for September will also influence later in the day.

Away from the economic calendar, China and Evergrande news updates along with central bank chatter will also need monitoring.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 15 points.

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