European Equities: It’s Another Busy Day on the Stats…

It’s another busy day on the stats, with economic data out of the Eurozone and the U.S to provide direction. There’s also geopolitics to consider…
Bob Mason
Global financial markets

Economic Calendar:

Tuesday, 1st October

  • Spanish Manufacturing PMI (Sep)
  • Italian Manufacturing PMI (Sep)
  • French Manufacturing PMI (Sep) Final
  • German Manufacturing PMI (Sep) Final
  • Eurozone Manufacturing PMI (Sep) Final
  • Eurozone Core CPI (YoY) (Sep) Prelim
  • Eurozone CPI (YoY) (Sep) Prelim

Wednesday, 2nd October

  • Spanish Unemployment Change

Thursday, 3rd October

  • Spanish Services PMI (Sep)
  • Italian Services PMI (Sep)
  • French Services PMI (Sep) Final
  • German Services PMI (Sep) Final
  • Eurozone Markit Composite PMI (Sep) Final
  • Eurozone Services PMI (Sep) Final
  • Eurozone Retail Sales (MoM) (Aug)

The Majors

The European majors rounded the month of September on a high. Leading the way was the CAC40, which rose by 0.66%, with the DAX30 and EuroStoxx600 rising by 0.38% and by 0.35% respectively.

A 3rd consecutive day in the green gave the DAX30 a 4.09% gain for the month, with the CAC40 and EuroStoxx600 both ending the month up by 3.6%.

While the markets were looking ahead to next week’s resumption of U.S – China trade talks, economic data contributed to the upside on the day.

The Stats

It was a busy day on the Eurozone economic calendar on Monday. Economic data included German retail sales and unemployment figures and Eurozone unemployment numbers.

Of less influence on the day were prelim September inflation figures out of Spain, Italy and Germany and Spanish GDP figures for the 2nd quarter.

According to Destatis,

German retail sales rose by 0.5% in August, month-on-month, partially reversing a 2.2% slide in July. Year-on-year, retail sales were up by 3.2%.

Germany’s unemployed fell by 10K in September, following a 2K increase in August. Economists had forecast a 5K increase.

From the Eurozone, the Eurozone’s unemployment rate fell from 7.5% to 7.4%, which was better than a forecast of 7.5%. According to Eurostat,

  • Greece and Spain had the highest unemployment rates at 17% and 13.8% respectively.
  • Compared with a year ago, the largest decreases in unemployment were recorded in Greece, which fell from 19.2% to 17%. Spain’s unemployment rate fell from 15% to 13.8%, with Cyprus falling from 8.2% to 6.8%.
  • The Euro area unemployment rate fell to its lowest rate since May 2008.

In Germany, consumer prices remained unchanged month-on-month, in September, which was worse than a forecasted 0.1% increase. In August, consumer prices had fallen by 0.2%.

From the U.S, the Chicago PMI failed to impress, with the PMI falling from 50.4 to 47.1. Economists had forecast a fall to 50.2.

Weakness in the U.S manufacturing sector failed to spook the majors ahead of today’s ISM Manufacturing PMI figures…

The Market Movers

From the DAX, it was a bullish end to the month for autos. BMW and Volkswagen led the way with gains of 1.18% and 1.14% respectively. Continental and Daimler weren’t far behind, rising by 0.55% and by 0.80% respectively.

It was not the best day for the banks, however, with Deutsche Bank and Commerzbank falling by 0.68% and 0.93% respectively.

From the CAC, it was another positive day for the banks. BNP Paribas led the way, rising by 1.09%. Credit Agricole and Soc Gen gained 0.22% and 0.80% respectively. For the autos, Renault slid by 0.72%, whilst Peugeot fell by 0.52%.

On the VIX Index

The VIX Index fell by 5.69% to end the day at 16.2.

A positive end to the month across the global equity markets pinned the VIX back in the day, with the loss coming in spite of the U.S administration’s latest moves against China in the extended trade war.

For September, the VIX ended the month with a 14.44% loss.

The Day Ahead

It’s another busy day ahead on the Eurozone economic calendar. Key stats include September manufacturing PMI numbers out of Spain and Italy and prelim September inflation numbers for the Eurozone.

While finalized French and German manufacturing figures will likely have a muted impact, Eurozone manufacturing PMI numbers will also influence.

From the U.S, the markets’ preferred ISM manufacturing PMI will also influence on the day. Forecasts are market risk positive.

On the geopolitical risk front, Brexit, Impeachment talk and trade war chatter will likely continue to keep the news wires busy on the day. The news would have to be quite dire, however, to distract the markets from today’s stats.

In the futures markets, at the time of writing, the DAX was up by 31.5 points, with the Dow Mini was up by 74 points.

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