While the markets are to respond to the overnight FOMC policy decision and projections, private sector PMIs and today's ECB policy decision and press conference will also be key.
French Manufacturing PMI (Dec) Prelim
French Services PMI (Dec) Prelim
German Manufacturing PMI (Dec) Prelim
German Services PMI (Dec) Prelim
Eurozone Private Sector PMIs (Dec) Prelim
Eurozone Wages / Trade Data
ECB Policy Decision and Press Conference
German PPI (MoM) (Nov)
German Ifo Business Climate Index (Dec)
Eurozone Inflation (Nov) Final
It was a relatively bullish day for the European majors on Wednesday.
The CAC40 rose by 0.47%, with the DAX30 and EuroStoxx600 gaining by 0.15% and by 0.26% respectively.
Economic data from Eurozone member states had a muted impact as the markets looked ahead to the overnight FOMC monetary policy decision and economic projections.
Ahead of the European open, economic data from China did draw interest, however, as did U.S stats late in the session.
In November, China industrial production rose by 3.8% year-on-year, which was up from an October 3.5%. Retail sales disappointed, however. After having been up 4.9% in October, retail sales increased by just 3.9% year-on-year in November.
Fixed asset investments also saw a more modest increase. In November, fixed asset investment rose by 5.2% year-on-year versus 6.1% in October.
Away from the economic calendar, concerns over the Omicron strain remained a drag mid-week.
Finalized November inflation figures for France, Spain, and Italy were in focus early in the session.
In November, France’s annual rate of inflation picked up from 2.6% to 2.8%, which was in line with prelim figures. Month-on-month, consumer prices rose by 0.4%, which was also in line with prelim figures. In October, consumer prices had also risen by 0.4%.
According to Insee.Fr,
Spain’s annual rate of inflation ticked up from 5.4% to 5.5% (prelim: 5.6%), with Italy’s annual rate of inflation accelerating from 3.0% to 3.7%, which was down from a prelim 3.8%.
Retail sales figures were key stats late in the European session.
In November, core retail sales increased by 0.3% month-on-month following a 1.8% rise in October. Economists had forecast a 0.9% increase. Retail sales rose by 0.3% following a 1.8% increase in October. Economists had forecast a 0.8% rise.
Other stats included NY Empire State Manufacturing and import and export price data. The stats had a muted impact on the European majors, with the markets looking ahead to the FED policy decision and projections.
For the DAX: It was a mixed day for the auto sector on Wednesday. Volkswagen slid by 1.60%, with Daimler and Continental falling by 1.18% and by 1.49% respectively. BMW ended the day up by 0.01%.
It was a bearish day for the banks, however. Deutsche Bank and Commerzbank ended the day with losses of 1.09% and 2.54% respectively.
From the CAC, it was also a bearish day for the banks Credit Agricole and Soc Gen fell by 0.72% and by 0.60% respectively, with BNP Paribas declining by 0.36%.
The French auto sector had a mixed session, however. Stellantis NV rose by 0.28%, while Renault ended the day down by 0.53%.
Air France-KLM and Airbus SE slid by 2.26% and by 2.45% respectively.
It was back into the red for the VIX on Wednesday, ending a 2-day winning streak.
Reversing a 7.78% increase from Tuesday, the VIX fell by 11.88% to end the day at 19.29.
The NASDAQ rallied by 2.15%, with the Dow and the S&P500 gaining by 1.08% and by 1.63% respectively.
It’s a particularly busy day ahead on the Eurozone’s economic calendar. On the economic data front, prelim December private sector PMIs for France, Germany, and the Eurozone are due out. Expect plenty of interest in the numbers.
On the monetary policy front, the ECB will also provide plenty of direction later in the session. Expect the press conference to be key as the markets look to see whether there’s any shift on Lagarde’s stance vis-à-vis inflation.
From the U.S, private sector PMIs, industrial production, and Philly FED Manufacturing Index figures will also draw interest.
Going into the European open, expect market reaction to the overnight FED monetary policy decision and economic projections to be key, however. We are likely to see the European majors track the U.S equity market moves from overnight.
Away from the economic calendar, however, expect Omicron news updates to also be key.
In the futures markets, at the time of writing, the Dow Mini was up by 39 points.
For a look at all of today’s economic events, check out our economic calendar.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.