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Bob Mason

Economic Calendar:

Wednesday, 27th November 2019

  • France Jobseekers Total

Thursday, 28th November 2019

  • Spanish CPI (YoY) (Nov) Prelim
  • Spanish HICP (YoY) (Nov) Prelim
  • German CPI (MoM) (Nov) Prelim

Friday, 29th November 2019

  • German Retail Sales m/m (Oct)
  • French Consumer Spending (MoM) (Oct)
  • French CPI m/m (Oct) Prelim
  • French HICP m/m (Oct) Prelim
  • French GDP (QoQ) (Q3)
  • German Unemployment Change (Nov)
  • German Unemployment Rate (Nov)
  • Italian CPI (MoM) (Nov) Prelim
  • Eurozone CPI (YoY) (Nov) Prelim
  • Eurozone Unemployment Rate (Oct)

The Majors

It was a mixed day for the European majors on Tuesday, with the EuroStoxx600 rising by 0.10%, while the DAX30 fell by 0.08%. The CAC40 rose by just 0.08% on the day.

The mixed bag and lack of any major moves came as the markets looked for further progress on trade talks between the U.S and China.

While news from Friday and the weekend had been positive, an actual conclusion had yet to be reached, which pinned back the majors.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Tuesday. Key stats included November’s GfK Consumer Climate figures out of Germany.

The GfK Consumer Climate Index rose from 9.6 to 9.7 in November, which was in line with forecasts.

According to the November report,

  • Consumer expectations improved in November, with the indicator rising by 15.5 points to 1.7. The upside came off the back of positive progress being made in trade talks between the U.S and China.
  • Income expectations also picked up, with the indicator increasing from 6.5 points to 45.5. In spite of reports of rising unemployment, consumers were reportedly highly optimistic.
  • Bucking the trend in the month was the propensity to buy sub-index, which fell by 1.7 points to 50.0. In spite of the decline, the indicator continues to sit at high levels, despite the economic woes in Germany.

From the U.S, consumer confidence eased slightly, with the CB Consumer Confidence Index falling from 126.1 to 125.5.

While falling short of forecasts, the decline was not enough to cause alarm, providing further support to the majors on the day.

The Market Movers

For the DAX: It was a bearish day for the auto sector. Volkswagen and Continental led the way, with both falling by 0.81%. Daimler wasn’t far behind, declining by 0.76%, while BMW saw a more modest loss of 0.66% on the day.

It was a mixed day for the banks, however. While Deutsche Bank slid 1.24%, Commerzbank rose by 0.25%.

From the CAC, it was another bearish day for the banks. BNP Paribas fell by 0.85% to lead the day down. Credit Agricole and Soc Gen saw more modest losses of 0.36% and 0.44% respectively.

French Autos also struggled, with Peugeot and Renault falling by 0.67% and by 0.02% respectively.

On the VIX Index

It was a 3rd consecutive day in the red on Tuesday as the U.S majors hit new record highs.  The VIX fell by 2.78% on Tuesday. Following on from a 3.81% decline on Tuesday, the VIX ended the day at 11.5.

Economic data out of the U.S and continued hopes of a phase 1 trade agreement between the U.S and China weighed on the VIX on Tuesday.

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. Key stats due out of the Eurozone are limited jobseeker figures out of France.

Barring dire numbers on the day, the stats are unlikely to have a material impact on the majors mid-week.

From the U.S, stats are on the heavier side. October durable goods orders, 3rd estimate GDP numbers and inflation figures are due out.

With the FED expected to stand pat on rates, the durable goods orders will be the key driver, assuming that GDP figures are line with 2nd estimates.

Outside of the numbers, the markets will continue to be sensitive to any updates from Beijing and Washington on trade.

In the futures market, at the time of writing, the DAX30 was up by 18.5 points, while the Dow was down by 11 points.

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