European Equities: Service Sector PMIs, U.S Stats, and the Senate Race in Focus
French Services PMI (Dec) Final
German Services PMI (Dec) Final
Eurozone Markit Composite PMI (Dec) Final
Eurozone Services PMI (Dec) Final
German CPI (MoM) (Dec)
Thursday, 7th January
German Factory Orders (MoM) (Nov)
German IHS Markit Construction PMI (Dec)
Italian CPI (MoM) (Dec)
Eurozone CPI (YoY) (Dec)
Eurozone Retail Sales (MoM) (Nov)
Friday, 8th January
German Industrial Production (MoM) (Nov)
German Trade Balance (Nov)
French Consumer Spending (MoM) (Nov)
Eurozone Unemployment Rate (Nov)
The Majors
It was a bearish day for the European majors on Tuesday, with the DAX30 falling by 0.55% to lead the way down. The CAC40 and the EuroStoxx600 saw relatively modest losses of 0.44% and 0.19% respectively.
Uncertainty ahead of the outcome to the Georgia runoff pegged the European majors back.
Concerns over the continued spike in new COVID-19 cases and the impact on the speed of the economic recovery also lingered.
COVID-19 vaccinations across Europe limited the downside, however, with the markets expecting the economy to rebound.
The Stats
It was a relatively busy day on the economic calendar, with the German economy in focus.
Key stats included November retail sales figures and December unemployment change numbers and unemployment rate.
In November, retail sales rose by 1.90%, month-on-month, following a 2.6% increase from October. Economists had forecast a 2% decline.
In December, unemployment decreased by 37k, following on from a 39k fall from November. The unemployment rate held steady at 6.1%. Economists had forecast a 10k rise in unemployment.
From the U.S
The market’s preferred ISM Manufacturing PMI figures were in focus late in the European session.
In December, the ISM Manufacturing PMI jumped from 57.5 to 60.7. Economists had forecast a fall to 56.5.
The Market Movers
For the DAX: It was a mixed day for the auto sector on Tuesday. Continental and Daimler rose by 0.17% and by 0.37% respectively, while BMW and Volkswagen fell by 0.88% and by 0.70% respectively.
It was a bullish day for the banks. Deutsche Bank rose by 1.44%, with Commerzbank rallying by 2.52%
From the CAC, it was a mixed day for the banks. BNP Paribas fell by 0.09%, while Credit Agricole and Soc Gen rose by 0.03% and by 0.11% respectively.
It was also a mixed day for the French auto sector. Peugeot slipped by 0.01%, while Renault rose by 0.81%.
Air France-KLM followed Monday’s 4.88% slide with a 0.88% decline, with Airbus SE ended the day down by 0.07%.
On the VIX Index
It was back in the red the VIX on Tuesday, marking a 3rd day in the red from 4 sessions. Partially reversing a 18.55% jump on Monday, the VIX fell by 6.04% to end the day at 25.34.
The NASDAQ and the S&P500 rose by 0.95% and by 0.71% respectively, with the Dow ending the day up by 0.55%.
The Day Ahead
It’s yet another busy day ahead on the economic calendar, with the Eurozone’s private sector back in focus.
December’s service sector and composite PMIs for Italy and Spain are due out later this morning. Finalized PMIs for France, Germany, and the Eurozone are also due out.
Barring any marked revisions from prelim figures, the focus will likely be on the Eurozone’s Composite PMI.
From the U.S, it’s also a busy day ahead on the economic calendar. ADP nonfarm employment change, factory orders, and the finalized Services PMI are due out late in the session.
The ADP figure will likely have the greatest influence on the European majors.
Away from the economic calendar, updates from Capitol Hill on the Georgia runoffs will continue to influence along with COVID-19 news.
The Futures
In the futures markets, at the time of writing, the Dow Mini was down by 20 points, while the DAX was up by 38 points.
For a look at all of today’s economic events, check out our economic calendar.
