European Equities: The FED, Earnings, and a Busy Economic Calendar to Provide Direction

The Majors

It was a relatively bullish day for the European majors on Wednesday.

The DAX30 rose by just 0.03%, with the CAC40 and the EuroStoxx600 ending the day up by 0.34% and by 0.29% respectively. For the EuroStoxx600, it was a new record close, with resources stocks delivering support.

Service sector PMI figures from China and economic data from the Eurozone provided little comfort, with the markets focused on the FED.

Economic data from the U.S and corporate earnings were market positive, however.

The Stats

Eurozone unemployment was in focus early in the European session.

In September, the Eurozone’s unemployment rate fell from 7.5% to 7.4%, which was in line with forecasts.

According to the Eurostat,

• For adults, the number of unemployed was estimated to stand at 12.079m in the euro area.
• Compared with August 2021, the number of unemployed was down 306,000.
• Year-on-year, the number of unemployed slid by 1.919m.

From the U.S

From the U.S, ADP nonfarm employment change figures were in focus ahead of service sector data.

According to the ADP, nonfarm employment increased by 571k in October, following a 523k rise in September. Economists had forecast a 400K rise.

In October, the ISM Non-Manufacturing PMI rose from 61.9 to a new ATH 66.7 versus a forecasted 62.0.

According to the October report,

• The employment index slipped from 53.0 to 51.6.
• New orders were also on the rise, with the index up 6.2 percentage points to an ATH 69.7%.
• Also hitting an all-time high was the Business Activity Index, which increased by 7.5 percentage points to 69.8%.
• Cost pressures were on the rise once more. The Prices Index reached its 2^nd highest reading ever, rising by 5.4 percentage points to 82.9%.

After the European open, the FED delivered its first monetary policy decision of the final quarter.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Wednesday. Volkswagen tumbled by 4.67%, with Daimler falling by 0.13%. Continental rallied by 2.40%, however, with BMW rising by 1.68%, supported by positive earnings.

It was a bullish day for the banks. Deutsche Bank rose by 1.18%, with Commerzbank up by 0.44%.

From the CAC, it was a bullish day for the banks. BNP Paribas rose by 0.76%, with Credit Agricole and Soc Gen gaining 0.44% and 0.20% respectively.

It was also a bullish day for the French auto sector. Stellantis NV rose by 1.02%, with Renault up by 0.38%.

Air France-KLM gained 0.61%, while Airbus SE ended the day down by 2.09%.

On the VIX Index

It was a 2^nd consecutive day in the red for the  VIX on Wednesday.

Following a 2.32% fall on Tuesday, the VIX declined by 5.80% to end the day at 15.10.

The NASDAQ rallied by 1.04%, with the S&P500 and the Dow gaining 0.65% and 0.29% respectively.