European Equities: Service Sector PMIs and ADP Nonfarms in Focus ahead of the FED
Wednesday, 3rd November
Eurozone Unemployment Rate (Sep)
Thursday, 4th November
German Factory Orders (MoM) (Sep)
Spanish Services PMI (Oct)
Italian Services PMI (Oct)
French Services PMI (Oct) Final
German Services PMI (Oct) Final
Eurozone Markit Composite PMI (Oct) Final
Eurozone Services PMI (Oct) Final
Friday, 5th November
German Industrial Production (MoM) (Sep)
French Non-Farm Payrolls (QoQ) (Q3)
German IHS Markit Construction PMI (Oct)
Eurozone Retail Sales (MoM) (Sep)
It was a relatively bullish day for the European majors on Tuesday.
The DAX30 rose by 0.94%, with the CAC40 and the EuroStoxx600 ending the day up by 0.49% and by 0.11% respectively.
Economic data from the Eurozone and member states delivered support amidst upbeat sentiment towards corporate earnings.
Market sentiment towards FED monetary policy pegged the majors back, however, ahead of tonight’s policy decision.
Manufacturing sector PMIs for Italy and Spain were in focus early in the session.
Finalized manufacturing PMIs for France, Germany, and the Eurozone also drew attention, however.
In October, Italy’s manufacturing PMI rose from 59.7 to 61.1 versus a forecasted 59.7. Spain’s manufacturing PMI slipped from 58.1 to 57.4 versus a forecasted 58.1.
For France, the manufacturing PMI declined from 55.0 to 53.6, which was up from a prelim 53.5.
Germany’s manufacturing PMI fell from 58.4 to 57.8, which was down from a prelim 58.2.
For the Eurozone, the Manufacturing PMI held steady at 58.3, which was down from a prelim 58.5.
According to the October survey,
- Supply-side issues disrupted production schedules and dented order books, causing growth of both metrics to slow.
- Supplier delivery times lengthened to one of the most severe extents on record.
- Input and output price inflation rates surged to new survey peaks.
By Member State,
- The Netherlands ranked 1st, with a 2-month high 62.5, followed by Ireland (62.1).
- Italy ranked 3rd, with a 4-month high 61.1, followed by Austria (60.6) that fell to an 8-month low.
- Greece ranked 5th, with a 2-month high 58.9 ahead of Germany, who’s PMI fell to a 9-month low 57.8.
- Spain and France ranked 7th and 8th, with PMIs of 57.4 and 53.6 respectively.
From the U.S
From the U.S, there were no major stats to provide the majors with direction later in the session.
The Market Movers
For the DAX: It was another mixed day for the auto sector on Tuesday. Continental fell by 1.08%m with Daimler and Volkswagen declining by 0.35% and by 0.34% respectively. BMW bucked the trend, however, ending the day up by 0.20%.
It was a bullish day for the banks. Deutsche Bank rose by 0.09%, with Commerzbank gaining by 0.77%.
From the CAC, it was a mixed day for the banks. Credit Agricole rose by 0.27%, while BNP Paribas and Soc Gen fell by 0.40% and by 0.25% respectively.
It was also a mixed day for the French auto sector, however. Stellantis NV rose by 0.46%, while Renault fell by 1.12%.
Air France-KLM slipped by 0.19%, while Airbus SE ended the day up by 0.58%.
On the VIX Index
It was back into the red for the VIX on Tuesday.
Reversing a 0.92% rise from Monday, the VIX fell by 2.32% to end the day at 16.03.
The Dow rose by 0.39%, with the S&P500and the NASDAQ gaining 0.37% and 0.34% respectively.
The Day Ahead
It’s a quieter day ahead on the Eurozone’s economic calendar. Eurozone unemployment figures for September will be in focus in the early part of the European session.
Barring an unexpected rise in the unemployment rate, however, we don’t expect the numbers to influence.
From the ECB, ECB President Lagarde could move the dial, however, should there be a shift in view on inflation.
Economic data from the U.S will provide direction later in the European session.
ADP Nonfarm Employment Change and ISM Non-Manufacturing PMI figures for October will be in focus.
While the numbers will influence, we can expect some apprehension ahead of the FED’s monetary policy decision, due after the European close.
With inflation pressures building and labor market conditions improving, the markets will be looking for any shift on interest rate policy.
Away from the economic calendar, corporate earnings will also continue to influence.
In the futures markets, at the time of writing, the Dow Mini was down by 17 points.
For a look at all of today’s economic events, check out our economic calendar.