European Equities: Private Sector PMIs and Employment Figures to Drive the Majors

The Majors

It was a bearish start to the week and end to the month for the European majors on Monday, which saw a 3^rd consecutive day in the red.

The DAX30 and EuroStoxx600 fell by 0.67% and by 0.62% respectively, with CAC40 declining by 1.11% to lead the way down.

Economic data from the Eurozone weighed on the majors on the day. GDP numbers from Italy and inflation figures from member states left the majors on the defensive.

The Stats

It was a busy day on the Eurozone economic calendar. Key stats included prelim August inflation figures for Germany, Italy, and Spain. 2^nd quarter GDP numbers for Italy were also of interest on the day.

On the inflation front, deflationary pressures picked up in August.

Germany’s harmonised index of consumer price fell by 0.2% in August and was down by 0.1% year-on-year. Month-on-month, the harmonised index of consumer prices fell by 0.2%.

Things were not much better from Italy. Consumer prices were down by 0.5% year-on-year, with the harmonised index for consumer prices down by 0.5%. More concerning, however, was the 1.3% tumble in the harmonised index for consumer prices in August.

Italy’s GDP numbers were also of little comfort, with finalized numbers being in line with prelim figures. Economists had forecast upward revisions. Quarter-on-quarter, the Italian economy contracted by 12.8%, while contracting by 17.7% year-on-year.

From the U.S

It was a quiet day on the economic data front, with no material stats to influence later in the day.

The Market Movers

For the DAX: It was yet another mixed day for the auto sector on Monday. BMW rallied by 1.73% to buck the trend on the day. Continental and Daimler fell by 0.44% and by 0.40%, with Volkswagen ending the day down by 0.20%.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank saw losses of 3.83% and 2.17% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole fell by 3.28% and by 3.46% respectively, with Soc Gen sliding by 4.04%.

It was another bearish day for the French auto sector. Peugeot and Renault saw relatively modest losses of 1.61% and 1.26% respectively.

Air France-KLM slid by 4.11%, with Airbus SE ending the day down by 3.64%.

On the VIX Index

It was back into the green for the VIX on Monday. Reversing a 6.17% fall from Friday, the VIX jumped by 15.03 to end the day at 26.41.

The S&P500 and Dow fell by 0.22% and by 0.78% respectively, while the NASDAQ ended the day up by 0.68%.

The Day Ahead

It’s a particularly busy day ahead on the Eurozone economic calendar. Key stats include August manufacturing PMIs for Italy and Spain, German unemployment numbers, and inflation figures for the Eurozone.

Finalized manufacturing PMIs for France, Germany, and the Eurozone and the Eurozone’s unemployment rate will also draw attention.

From the early part of the day, the market’s preferred Caixin manufacturing PMI for China will set the tone.

Later in the session, the ISM Manufacturing PMI will also provide direction, as the markets look for a continued v-shaped economic recovery.

Away from the economic calendar, geopolitics and COVID-19 news will also need monitoring on the day.

The Futures

In the futures markets, at the time of writing, the Dow was down by 219 points.