European Equities: The Futures Say Red as Brexit Hits another Speedbump
The majors held onto gains in a choppy Tuesday. A lack of stats today leaves the majors in the hands of corporate earnings and geopolitics…
Economic Calendar:
Thursday, 25th October
- French Manufacturing PMI (Oct) Prelim
- French Services PMI (Oct) Prelim
- German Manufacturing PMI (Oct) Prelim
- German Services PMI (Oct) Prelim
- Eurozone Manufacturing PMI (Oct) Prelim
- Eurozone Markit Composite PMI (Oct) Prelim
- Eurozone Services PMI (Oct) Prelim
- ECB Deposit Facility Rate (Oct)
- ECB Interest Rate Decision (Oct)
Friday, 26th October
- GfK German Consumer Climate (Nov)
- German Business Expectations (Oct) / Current Assessment (Oct) / Ifo Business Climate Index (Oct)
The Majors
The European majors found further support on Tuesday, following Monday’s gains. Leading the way was the CAC40, which rose by 0.17%. The DAX30 and EuroStoxx600 saw more modest gains of just 0.05% and 0.09% respectively.
Economic data was on the lighter side on Tuesday, leaving geopolitics in focus throughout the day.
From the UK Parliament, it was a mixed day, with the British PM managing to get the support for the latest Withdrawal Bill Agreement, while losing control of the Brexit schedule.
Parliament voted down Johnson’s plan to deliver Brexit by 31st October.
For the majors, the outcome was ultimately skewed to the positive, as Britain moved further away from the chance of a no-deal Brexit.
On the trade war front, positive comments from both, Beijing and Washington, provided support on the day.
The Stats
It a quiet day on the Eurozone economic calendar on Tuesday. There were no material stats from the Eurozone on Tuesday to provide the majors with direction.
From the U.S, September’s existing home sales figures had a muted impact on the majors.
Existing home sales fell by 2.20% in September, reversing a 1.5% rise in August.
The Market Movers
For the DAX: It was another mixed day for the auto sector. Volkswagen bucked the trend, falling by 0.42%. Continental led the way, however, rallying by 2.83%, with BMW and Daimler rising by 0.43% and by 0.33% respectively.
It wasn’t a mixed day for the banks, however, with Commerzbank and Deutsche Bank falling by 0.79% and by 1.96% respectively.
Disappointing UBS earnings results weighed on the day.
From the CAC, it was a mixed day for the banks. BNP Paribas rose by another 0.02%, while Credit Agricole eked out a 0.25% gain. Soc Gen bucked the trend, falling by 0.34%. For the autos, it was also a mixed day. While Peugeot rose by 1.26%, Renault fell by 0.16% on the day.
On the VIX Index
The VIX Index saw green on Tuesday, rising by 3.29%. Reversing a 1.75% fall from Monday, the VIX ended the day at 14.5.
Brexit uncertainty provided the VIX with support on the day.
The Day Ahead
It’s another quiet day ahead on the Eurozone economic calendar. There are no material stats due out of the Eurozone to provide the major with direction on the day.
The lack of stats will leave the markets to continue to respond to events in the UK parliament. While a no-deal Brexit remains unlikely, talk of a general election could test risk sentiment.
On the earnings front. Boeing, Caterpillar, Microsoft, and Tesla are all due to release earnings later today that will influence risk sentiment.
In the futures market, at the time of writing, the DAX30 was down by 104 points, with the Dow down by 77 points.
