FXEMPIRE
All

European Equities: The Trade Obsession Will Sideline the Stats

It could be another day in the red for the majors as sentiment towards trade turns sour. Any positive data will be overshadowed by any trade talk…
Bob Mason
Robotic Arm modern industrial technology. Automated production c

Economic Calendar:

Tuesday, 10th December 2019

  • French Non-Farm Payrolls (QoQ) (Q3)
  • German ZEW Current Conditions (Dec)
  • German ZEW Economic Sentiment (Dec)
  • Eurozone ZEW Economic Sentiment (Dec)

Thursday, 12th December 2019

  • German CPI (MoM) (Nov) Final
  • French CPI (MoM) (Nov) Final
  • French HICP (MoM) (Nov) Final
  • Eurozone Industrial Production (MoM) (Oct)
  • ECB Deposit Facility Rate (Dec) / ECB Interest Rate Decision (Dec)
  • ECB Press Conference

Friday, 13th December 2019

  • Spanish CPI (YoY) (Nov) Final
  • Spanish HICP (YoY) (Nov) Final

The Majors

It was a bearish start to the week for the European majors, with the CAC40 falling by 0.59% to lead the way down.

The DAX30 and EuroStoxx600 weren’t far behind, with losses of 0.46% and 0.24% respectively.

Economic data from the weekend weighed on the futures markets from the get-go on Monday, as trade data out of China disappointed.

If the trade data and failure to deliver a phase 1 agreement is anything to go by, more economic doom and gloom could be on the horizon. Year-on-year, China exports fell for a 4th consecutive month in November. That made it 7 monthly declines out of 11 for the current year…

On the geopolitical front, a lack of progress towards a phase 1 agreement also pressured the majors at the start of the week.

Talk from U.S administration, late last week, of 15th December tariffs to go ahead as scheduled was the negative, particularly with China demanding a rollback on existing tariffs.

With the UK General Election now just days away, there’s plenty for the markets to consider in the coming days.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Monday. Key stats were limited German trade data for October that delivered some much needed positive news.

According to Destatis, the trade surplus widened from €19.2bn to €20.6n in October. Economists had forecast a surplus of €19.0bn.

  • Germany exported goods to the value of €119.5bn, an increase of 1.9% year-on-year.
    • Exports to EU member states increased by just 0.1% to €70.0bn.
    • Goods to the value of €43.8bn (-0.9%) were exported to the Euro area.
    • Exports of goods to countries outside the EU totaled €49.5bn, a 4.6% rise year-on-year.
  • Imports decreased by 0.6% to €98.0bn
    • Imports from EU member states fell by 0.2% to €55.2bn.
    • The value of goods imported from the Euro area stood at €35.5bn, up by 0.1% year-on-year.
    • Imports from countries outside of the EU totaled €42.8bn, down by 1.0%.

From the U.S,

There were no material stats to provide direction late in the session.

The Market Movers

For the DAX: It was a bearish day for the auto sector, with negative sentiment towards trade overshadowing positive trade figures. Continental and Daimler led the way down, with losses of 1.19% and 1.00% respectively. BMW and Volkswagen weren’t far behind, with declines of 0.95% and 0.37% respectively on the day.

By contrast, it was a positive day for the banks, with Deutsche Bank and Commerzbank rising by 0.35% and by 0.13% respectively.

From the CAC, it was a mixed day for the banks. Credit Agricole bucked the trend with a 0.28% gain on the day. BNP Paribas and Soc Gen fell by 0.33% and by 0.09% respectively.

In spite of the negative sentiment towards trade, Renault avoided red on the day, rising by 0.11%. Peugeot tracked its peers from Germany, however, sliding by 1.86%.

On the VIX Index

A run of 3 consecutive days in the red came to an abrupt end on Monday, with the VIX jumping by 16.5% on the day.

Reversing a 6.2% slide from Friday, with interest, the VIX closed out the day at 15.9.

The trade sentiment pendulum swung back in favor of the bears on Monday, as economic data from China and a lack of progress towards a phase 1 agreement weighed on the U.S markets.

With the 15th December deadline rapidly approaching and the UK General Election on Thursday also there, it’s unlikely to be smooth sailing… At a minimum, the U.S administration would need to delay the rollout of tariffs that are due to kick in on Sunday…

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. Key stats due out of the Eurozone include 3rd quarter nonfarm payrolls out of France and business sentiment figures for Germany and the Eurozone.

Barring particularly dire numbers from France, the market focus will be on the sentiment numbers due out later this morning. Forecasts are DAX negative.

From the U.S, 3rd quarter nonfarm productivity and unit labor cost figures are unlikely to influence, leaving geopolitics in focus late on.

On the geopolitical front, the 15th December tariff deadline is approaching and there’s still no phase 1 agreement. From the UK, some uncertainty going into Thursday’s General Election will also be a test for the majors.

Expect chatter on trade to be the main area of focus, with any updates likely to overshadow the numbers.

In the futures market, at the time of writing, the DAX30 was down by 19 points, while the Dow was up by 8 points.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US