European Equities: The China Re-open and U.S Nonfarm Payrolls in Focus

The Majors

It was a bullish day for the European majors on Thursday.

The DAX30 rallied by 1.85%, with the EuroStoxx600 and the CAC40 ending the day up by 1.60% and by 1.65% respectively.

Economic data from Germany failed to weigh on the majors in spite of particularly disappointing industrial production figures.

Hopes of an imminent end to the U.S debt ceiling saga provided riskier assets with support on the day.

Going into the European open, the European markets took their cues from Asia and the U.S futures, ahead of China’s market reopen this morning.

The Stats

Key stats included industrial production figures from Germany.

The German Economy

In August, industrial production slid by 4.0% versus a forecasted 0.6% decline. Production had risen by 1.3% in July.

According to Destatis,

• Production in industry excluding energy and construction was down by 4.7%.
  • Producers continued to report about being constrained by shortage of supply of intermediate products.
  • Within industry, the production of capital goods slumped by 7.8%.
  • Motor vehicle, trailer, and semi-trailers manufacturing tumbled by 17.5%, with machinery and equipment production down 6.3%.
  • The production of consumer goods and intermediate goods fell by 2.6% and by 2.4% respectively.
• Outside industry, energy production was up by 4.1%, while production in construction slid by 3.1%.
• Year-on-year, industrial production increased by 1.7% after having been up by 6.0% in July.

From the U.S

Weekly jobless claims were in focus later in the day.

In the week ending 1^st October, initial jobless claims fell from 364k to 326k. Economists had forecast a decline to 348k.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Thursday. Continental and Daimler jumped by 4.25% and by 4.31% respectively to lead the way. BMW and Volkswagen also found strong support, rising by 2.49% and 2.55% respectively.

It was also a bullish day for the banks. Deutsche Bank rallied by 4.45%, with Commerzbank ending the day up by 3.72%.

From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen rose by 1.58% and by 2.01% respectively, with Credit Agricole rallying by 3.23%.

It was a mixed day for the French auto sector, however. Stellantis NV slid by 4.17%, while Renault ended the day up by 2.38%.

Air France-KLM fell by 1.73%, while Airbus SE rose by 0.69%.

On the VIX Index

It was a 3^rd consecutive day in the red for the VIX on Thursday.

Following a 1.41% fall on Wednesday, the VIX declined by 6.95% to end the day at 19.54.

The NASDAQ rose by 1.05%, with the Dow and S&P500 ending the day up by 0.98% and by 0.83% respectively.

The Day Ahead

It’s a quieter day ahead on the Eurozone’s economic calendar. German trade data will be in focus going into the European open.

While the numbers will draw interest, nonfarm payrolls from the U.S will be the key stat of the day, however. A sharp increase in payrolls would suggest an imminent move by the FED, which would be a negative for the European boerses.

Away from the economic calendar, energy prices will also continue to be an area of focus for the markets.

Ahead of the European open, moves across the Asian markets will set the tone as China reopens after the holidays…

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 28 points.

For a look at all of today’s economic events, check out our economic calendar.