European Equities: The Coronavirus, the ECB and Economic Data to Test the MajorsThere’s plenty for the markets to consider in the day ahead and the ECB and Eurozone consumer confidence figures will be a part of it…
Thursday, 23rd January 2020
ECB Monetary Policy Decision and ECB Press Conference
Eurozone Consumer Confidence Prelim
Friday, 24th January 2020
French Manufacturing PMI (Jan) Prelim
French Services PMI (Jan) Prelim
German Manufacturing PMI (Jan) Prelim
German Services PMI (Jan) Prelim
German IFO Business Climate Index
Eurozone Manufacturing PMI (Jan) Prelim
Eurozone Markit Composite PMI (Jan) Prelim
Eurozone Services PMI (Jan) Prelim
ECB President Lagarde Speaks
It was a bearish day for the European majors on Wednesday, with the CAC40 falling by 0.58% to lead the way down. The DAX30 and EuroStoxx600 saw more modest losses of 0.30% and 0.08% respectively.
Negative sentiment towards the coronavirus left the European majors in the red, as news of the rising death toll hit the wires.
Risk appetite had returned through the Asian session giving the European majors an early boost before they hit reverse.
It was a quiet day on the Eurozone economic calendar on Wednesday, with no material stats to provide the majors with direction.
There were also no stats from the U.S to influence later in the day.
The Market Movers
For the DAX: It was another bearish day for the auto sector. Daimler tumbled by 2.23% to lead the way, with Volkswagen falling by 1.07%. BMW and Continental saw more modest losses of 0.45% and 0.50% respectively.
It was another mixed day for the banks, however, with Commerzbank falling by 0.16%, while Deutsche Bank gained 1.44% on the day.
From the CAC, it was a bearish day for the banks. BNP Paribas fell by 0.26%, with Credit Agricole and Soc Gen down by 1.06% and by 0.35% respectively.
The French auto sector also saw red, with Peugeot and Renault falling by 0.49% and by 0.84% respectively.
On the VIX Index
Market jitters over the spread of the Coronavirus provided further support to the VIX on Wednesday. Following on from a 6.20% gain on Tuesday, the VIX rose by 0.47% to end the day at 12.9.
When considering the risk of a global pandemic, the upside was relatively modest, however.
Late on Wednesday, the markets responded to plans by the Chinese government to contain the virus, which limited the upside in the VIX on the day.
The Day Ahead
It’s a busy day on the Eurozone economic calendar. While key stats are limited to Eurozone consumer confidence figures due out late in the session, the ECB is in action.
Any revisions to growth forecasts and details on revisions to the ECB’s monetary policy framework will be key drivers.
Through the ECB press conference, ECB President Lagarde could deliver a more optimistic outlook, which would be market positive.
There will be concerns over the coronavirus and possible tariffs on EU cars, however, to test the more optimistic…
In the futures markets, at the time of writing, the DAX was down by 38 points, with the Dow down by 35 points.