European Equities: Stats and Geopolitics to Drive the Majors

A busy economic calendar and uncertainty over how China will respond to the HK Bill will test the majors at the end of the month.
Bob Mason
Businessman touching stock market graph on a virtual screen display.

Economic Calendar:

Friday, 29th November 2019

  • German Retail Sales m/m (Oct)
  • French Consumer Spending (MoM) (Oct)
  • French CPI m/m (Oct) Prelim
  • French HICP m/m (Oct) Prelim
  • French GDP (QoQ) (Q3)
  • German Unemployment Change (Nov)
  • German Unemployment Rate (Nov)
  • Italian CPI (MoM) (Nov) Prelim
  • Eurozone CPI (YoY) (Nov) Prelim
  • Eurozone Unemployment Rate (Oct)

The Majors

It was a day in the red for the European majors on Thursday, with the DAX30 falling by 0.31% to lead the way. The CAC40 and EuroStoxx600 saw more modest losses of 0.24% and 0.14% respectively.

News of U.S President Trump signing the HK Bill in the early hours of Thursday morning pressured the markets.

China had demanded Trump to veto the bill and responded with the threat of retaliation.

While the markets look on to see how China responds, images of HK Protesters celebrating in the streets waving U.S flags will undoubtedly have riled Beijing even further.

Both sides had reportedly come close to a phase 1 agreement, so it remains to be seen whether China will withdraw or respond in some other way.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Thursday. Key stats included prelim November inflation figures out of Germany and Spain.

From Spain, the annual rate of inflation picked up from 0.1% to 0.4% in November, according to prelim figures. Whilst economists had forecast a 0.2% annual rate of inflation, the latest numbers were not going to cause a shift in ECB monetary policy.

Out of Germany, consumer prices fell by 0.8% in November, month-on-month, reversing a 0.1% rise from October. Economists had forecast a 0.6% decline.

The stats had a muted impact on the majors, however, with geopolitical risk the key driver on the day.

With the U.S markets closed for Thanksgiving, there were no material stats from the U.S to influence, with volumes on the lighter side.

The Market Movers

For the DAX: It was a bearish day for the auto sector. BMW slid by 1.37% to lead the way down. Continental and Daimler were also amongst the worst performers, with losses of 0.89% and 0.90% respectively. Volkswagen saw a more modest loss of 0.65% on the day.

It was also a bearish day for the banks. Deutsche Bank fell by 0.87%, with Commerzbank down by 0.73%.

From the CAC, it was a bearish day for the banks. Credit Agricole fell by 1.34% to lead the way. BNP Paribas and Soc Gen saw more modest losses of 0.62% and 0.74% respectively.

Things were not much better for the French Auto sector, with Peugeot and Renault falling by 0.85% and by 1.45% respectively.

On the VIX Index

With the U.S markets closed for Thanksgiving, the VIX was also on a break for the day.

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. Key stats due out of the Eurozone include French and German retail sales figures and unemployment figures out of Germany.

Barring dire numbers, GDP numbers out of France and prelim November inflation figures out of Italy and the Eurozone will likely have a muted impact on the majors.

The market focus remains on Labour market conditions, consumer confidence and spending, which has continued to support the Eurozone economy.

From the U.S, there are no material stats to provide direction, with the U.S markets scheduled for an early close.

On the geopolitical risk front, China has yet to respond to Trump’s execution of the HK Bill. Any negative news would certainly pressure the majors on the day.

In the futures market, at the time of writing, the DAX30 was up by 12.5 points, while the Dow was down by 40 points.

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