European Equities: Manufacturing PMIs and Geopolitics in Focus

It’s a busy day ahead, with manufacturing PMI numbers from China, the Eurozone, and the U.S in focus. Stats from the weekend provided early support.
Bob Mason
Businessman touching stock market graph on a virtual screen display.

Economic Calendar:

Monday, 2nd December 2019

  • Spanish Manufacturing PMI (Nov)
  • Italian Manufacturing PMI (Nov)
  • French Manufacturing PMI (Nov) Final
  • German Manufacturing PMI (Nov) Final
  • Eurozone Manufacturing PMI (Nov) Final

Tuesday, 3rd December 2019

  • Spanish Unemployment Change

Wednesday, 4th December 2019

  • Spanish Services PMI (Nov)
  • Italian Services PMI (Nov)
  • French Services PMI (Nov) Final
  • German Services PMI (Nov) Final
  • Eurozone Markit Composite PMI (Nov) Final
  • Eurozone Services PMI (Nov) Final

Thursday, 5th December 2019

  • German Factory Orders (MoM) (Oct)
  • Eurozone GDP (QoQ) (Q3) 3rd Estimate
  • Eurozone GDP (YoY) (Q3) 3rd Estimate
  • Eurozone Retail Sales (MoM) (Oct)

Friday, 5th December 2019

  • German Industrial Production (MoM) (Oct)

The Majors

It was a day in the red for the European majors on Friday, with the EuroStoxx600 falling by 0.44% to lead the way down. The DAX30 and CAC40 saw more modest losses of 0.07% and 0.13% respectively.

News of U.S President Trump signing the HK Bill in the early hours of Thursday morning continued to pressure the markets.

China had yet to retaliate against Trump’s latest move that could materially impact progress towards a phase 1 trade agreement.

The Stats

It was a busy day on the Eurozone economic calendar on Friday. Key stats included retail sales and unemployment figures out of Germany and French GDP and consumer spending figures.

From  Germany, the stats were mixed on the day. Retail sales slid by 1.9% in October, reversing a 0.1% gain from September. Unemployment fell by 16k in November, however, which was better than a forecasted 5k rise.

The numbers will have eased concerns over labor market conditions, which should support confidence and a rebound in spending.

Out of France, the finalized GDP came in at 0.3%, which was in line with prelims. Consumer spending disappointed, however, with a 0.2% rise coming up short of a forecasted 0.3% increase. In September, spending had fallen by 0.3%.

Of less influence on the day were prelim November inflation figures out of France, Italy and the Eurozone.

There were no material stats from the U.S to provide direction. With the U.S markets on a half-day, volumes were on the lighter side late in the session.

The Market Movers

For the DAX: It was another bearish day for the auto sector. Continental slid by 1.79% to lead the way down. Daimler and Volkswagen were also amongst the worst performers, with losses of 1.52% and 0.84% respectively. BMW saw a more modest loss of 0.65% on the day.

It was also a bearish day for the banks. Deutsche Bank fell by 0.76%, with Commerzbank down by 0.21%.

From the CAC, it was a mixed day for the banks. Soc Gen bucked the trend on the day, rising by 0.76%. BNP Paribas and Credit Agricole fell by 0.14% and 0.56% respectively.

It was also a mixed end to the week for the French Auto sector, with Peugeot falling by 1.44%, while Renault gained 0.35%.

On the VIX Index

After the market close on Thursday, the VIX rose by 7.4% to end the week at 12.6.

Market reaction to Trump’s signing of the HK Bills weighed on risk appetite at the end of the week, providing the VIX with support.

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. Key stats due out of the Eurozone include Spanish and Italian manufacturing PMI numbers for November. Finalized manufacturing PMIs are also due out of France, Germany, and the Eurozone.

Barring deviation from prelim figures, the focus will be on Italy and the Eurozone’s PMI numbers.

From the U.S, the ISM Manufacturing PMI for November will also provide direction late in the day.

From the weekend, China’s November NBS Manufacturing and Non-Manufacturing PMIs came in ahead of forecasts, which is market risk positive.

The Manufacturing PMI rose from 49.3 to 50.2, with the Non-Manufacturing PMI rising from 52.8 to 54.4.

Of greater influence, however, will be the Caixin Manufacturing PMI that is due out later this morning…

On the geopolitical risk front, any reaction from China on Trump’s signing of the HK Bill will be in focus, as will any updates from trade talks.

From the UK, with the opinion polls showing Boris Johnson’s lead crumble in the last week, the prospects of a hung parliament could also test the majors.

In the futures market, at the time of writing, the DAX30 was up by 39.5 points, with the Dow up by 77 points.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US