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Economic Calendar:

Friday, 5th March

German Factory Orders (MoM) (Jan)

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The Majors

It was a mixed day for the European majors on Thursday.

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Mixed economic data from the Eurozone and the U.S provided little support for the European boerses.

The lingering fear of the impact of reinflation on monetary policy continued to weigh on the majors late in the week.

On Thursday, the DAX30 the EuroStoxx600 fell by 0.17% and by 0.38% respectively, while the CAC40 rose by 0.01%.

The European majors came under further pressure as the markets responded to a pickup in U.S Treasury yields on the day.

The Stats

It was a relatively busy day on the economic calendar on Thursday.  Key stats from the Eurozone included Eurozone retail sales figures along with January’s unemployment rate.

Retail sales slid by 5.9% in January, reversing a downwardly revised 1.8% increased from December. Economists had forecast a more modest 1.1% fall.

Year-on-year, retail sales fell by 6.4% across the Eurozone in January, which was worse than a forecasted 1.2% decline. In December, retail sales had risen by an upwardly revised 0.9%.

According to Eurostat,

  • Month-on-month, non-food product sales slid by 12.0%, with automotive fuel sales by 1.1%.
  • There was a 1.1% increase in the sales of food, drinks, and tobacco.
  • By member state, Austria (-16.6%), Ireland (-15.7%), and Slovakia (-11.1%) registered the largest falls.
  • Estonia registered the largest increase, rising by a relatively modest 1.7%.

While retail sales figures disappointed, the Eurozone’s unemployment rate held steady at 8.1% in January. December’s unemployment rate was revised down from 8.3% to 8.1%.

According to Eurostat,

  • While stable at 8.1%, this was up from January 2020’s 7.4%.

Ahead of today’s key stats, construction PMI figures from Germany failed to impress. In February, the IHS Markit Construction PMI slid from 46.6 to 41.0.

From the U.S

Weekly jobless claim figures were in focus along with January factory orders late in the European session.

In the week ending 26th February, initial jobless claims increased from 736k to 745k. Economists had forecast a rise to 750k.

Factory orders were positive for riskier assets. In January, factory orders increased by 2.6%, following a 1.6% rise in December. Economists had forecast a 2.1% increase.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Volkswagen rallied by 2.02%, with Continental and Daimler rising by 0.16% and by 1.15% respectively. BMW bucked the trend, however, falling by 0.32%.

It was a bearish day for the banks. Deutsche Bank slid by 3.16%, with Commerzbank falling by 1.34%.

From the CAC, it was a bearish day for the banks. BNP Paribas fell by 0.14%, with Credit Agricole and Soc Gen seeing heavier losses of 1.30% and 1.23% respectively.

The French auto sector also struggled. Stellantis NV and Renault fell by 0.25% and by 0.50% respectively.

Air France-KLM and Airbus SE ended the day down by 1.08% and by 0.16% respectively.

On the VIX Index

It was a 3rd consecutive day in the green for the VIX on Thursday. Following a 10.66% gain on Wednesday, the VIX rose by 7.12% to end the day at 28.57.

The NASDAQ slid by 2.11%, with the Dow and S&P500 falling by 1.11% and by 1.34% respectively.

The Day Ahead

It’s quieter day ahead on the European economic calendar. German factory order numbers for January are due out later this morning.

Expect any heavy fall in orders to raise questions over the recent uptrend in German survey-based figures.

Back in January, Germany’s Manufacturing PMI survey had reported a continued rise in new orders, albeit at a slower pace than in December.

From the U.S, nonfarm payrolls and February’s unemployment rate will also garner plenty of interest later in the day.

Ahead of the European open, China Premier Li Keqiang’s National People’s Congress speech will draw interest.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 12 points.

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

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