European Equities: Manufacturing Sector PMIs and Inflation in Focus

The EuroStoxx600 rose by 0.18%, while the CAC40 and the DAX30 ended the day down by 0.62% and by 0.68% respectively.

A busy economic calendar failed to deliver support, with stats from China, the Eurozone, and the U.S delivering mixed signals.

In September, China’s Caixin Manufacturing PMI rose from 49.2 to 50.0, while the NBS Manufacturing PMI fell from 50.1 to 49.6. Service sector activity fared better, with the NBS Non-Manufacturing PMI rising from 47.5 to 53.2.

Weaker than expected jobless claims figures from the U.S offset an upward revision to 2^nd quarter GDP numbers later in the day.

The Stats

It’s been a particularly busy start to the day on the Eurozone economic calendar.

Key stats included French consumer spending, French and Italian inflation, and German unemployment figures.

It was a mixed set of numbers, testing support for the majors through the early part of the session, however.

The French Economy

In August, consumer spending rose by 1.0%, partially reversing a 2.2% slide from July. Economists had forecast a 0.1% increase.

Inflation figures were EUR negative, however. Month-on-month, consumer prices fell by 0.2%, with the Harmonized Consumer Price Index also down 0.2%. Economists had forecast declines of 0.1% respectively.

The German Economy

German unemployment figures also disappointed. In September, Germany’s unemployment rate held steady at 5.5% versus a forecasted decline to 5.4%. German unemployment fell by 30k in the month versus a forecasted 33k decline. In August, unemployment had fallen by 53k.

While negative for the EUR, softer than expected inflation figures from Germany drew interest. In September consumer prices held steady following a 0.9% increase in August. Economists had forecast a 0.1% rise.

The Eurozone

For the Eurozone, unemployment figures were somewhat better, with the unemployment falling from 7.6% to 7.5%. Economists had forecast a decline to 7.5%.

Elsewhere

While the focus was on inflation, Ialy’s inflation figures had a muted impact on the EUR. In September, consumer prices fell by 0.1% versus a forecasted 0.3% decline. Consumer prices had risen by 0.4% in August.

From the U.S

Finalized 2^nd quarter GDP and initial jobless claims were in focus later in the European session.

For the 2^nd quarter, the U.S economy expanded by 6.7%, which was up from a prelim 6.6%.

In the week ending 24^th September, initial jobless claims disappointed, however. Claims rose from 351k to 362k, which was worse than a forecasted 335k.

Late in the day, Chicago PMI numbers for September also drew interest.

The Chicago PMI fell from 66.8 to 64.7 versus a forecasted decline to 65.0.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. BMW declined by 1.35% to lead the way down, with Volkswagen falling by 0.96%. Continental and Daimler saw modest losses of 0.19% and 0.14% respectively, however.

It was also a mixed day for the banks. Deutsche Bank rose by 0.77%, while Commerzbank fell by 0.24%.

From the CAC, it was a mixed day for the banks. BNP Paribas and Soc Gen rose by 0.33% and by 0.30% respectively. Credit Agricole saw red, however, falling by 0.83%.

It was a bearish day for the French auto sector. Stellantis NV and Renault both ended the day down by 1.58% respectively.

Air France-KLM tumbled by 7.52%, while Airbus SE fell by 1.88%.

On the VIX Index

It was a back into the green for the VIX on Thursday, marking a 3^rd increase of the week.

Partially reversing a 2.97% fall from Wednesday, the VIX rose by 2.57% to end the day at 23.14.

The NASDAQ slipped by 0.44%, with the Dow and S&P500 ending the day down by 1.59% and by 1.19% respectively.

The Day Ahead

It’s another particularly busy day ahead on the Eurozone’s economic calendar.

German retail sales and Manufacturing PMIs for Italy and Spain are due out. Finalized Manufacturing PMIs are also due out for France, Germany, and the Eurozone.

Barring marked revisions to prelim figures expect German retail sales and Italy and the Eurozone’s PMIs to be key.

From the U.S, ISM Manufacturing PMI figures for September and personal spending and inflation figures for August will also influence.

While the PMI will draw interest, the inflation and personal spending figures will likely have a greater impact.

Ahead of the European open, 3^rd quarter Tankan survey numbers from Japan will set the tone.

From Capitol Hill, news updates on the debt-ceiling will also be an area of focus on the day.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 55 points.

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