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Economic Calendar:

Friday, 18th September

German PPI (MoM) (Aug)


The Majors

It was bearish for the European majors on Thursday, with CAC40 and EuroStoxx600 seeing a run of 4 consecutive daily gains come to an end.

The CAC40 and the EuroStoxx600 fell by 0.69% and by 0.51% respectively, with the DAX30 ending the day down by 0.36%.

Central bank sentiment towards economic recoveries weighed on the markets on Thursday. The futures were already under pressure in response to the FED’s dovish signals. A projection for rates to hold near zero through to 2023 painted a grim picture of the FED’s sentiment towards the U.S economic outlook.

Things were not much better from Japan, with the Bank of Japan stressing that the economy was in a serious condition. Rounding things off on the day was the Bank of England, who highlighted that the economic outlook remained unusually uncertain.

On the economic data front, there was nothing from the numbers to change the somber mood.

The Stats

It was another quiet day on the Eurozone economic calendar. Key stats included August finalized inflation figures for the Eurozone.

The annual rate of core inflation softened from 1.2% to 0.4% in August, which was in line with prelim figures.

In August, consumer prices fell by 0.4%, following on from a 0.4% decline in July. As a result of the slide in consumer prices in August, the annual rate of inflation was down 0.2%, which was also in line with forecasts. In July, the annual rate of inflation had stood at 0.4%.

According to Eurostat,

  • The lowest annual rates were registered in Cyprus (-2.9%), Greece (-2.3%), and Estonia (-1.3%).
  • The highest contribution to the annual euro area inflation rate came from food, alcohol & tobacco (+0.33 pp).

From the U.S

Key stats included weekly jobless claims figures and September’s Philly FED Manufacturing Index numbers.

Other stats included August housing sector data that had a muted impact on the majors on the day.

For the week ending 11th September, initial jobless claims stood at 860k, down from 893k claims from the week prior. Economists had forecast claims of 850k, however.

In September, the Philly FED Manufacturing Index slipped from 17.2 to 15.0, which was in line with forecasts.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Thursday. Daimler bucked the trend on Thursday, rising by 0.71%. Continental and Volkswagen saw losses of 0.72% and 0.26% respectively, with BMW slipping by 0.02%.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 1.03% and by 2.79% respectively.

From the CAC, it was a mixed day for the banks. Credit Agricole and BNP Paribas fell by 1.04% and by 0.80% respectively. Soc Gen ended the day up by 0.45%.

It was a bearish day for the French auto sector, however. Peugeot and Renault ended the day down by 1.16% and by 0.19% respectively.

Air France-KLM reversed a 0.87% loss from Wednesday, rallying by 2.78%, with Airbus SE gaining 0.47%.

On the VIX Index

It was a second consecutive day in the green for the VIX on Thursday. Following on from a 1.76% gain on Wednesday, the VIX rose by 1.61% to end the day at 26.46.

Continued market reaction to the FOMC projections and press conference from Wednesday left the majors in the red.

Disappointing Jobless claims and Philly FED Manufacturing numbers added further pressure on the day.

The NASDAQ and S&P500 fell by 1.27% and by 0.84% respectively, with the Dow seeing a loss of 0.47%.

The Day Ahead

It’s a quiet day ahead on the Eurozone economic calendar. Key stats include German wholesale inflation figures for August.

With deflationary pressures hitting the Eurozone, a softening in wholesale inflationary pressures would add to the negative sentiment.

Later in the day, prelim U.S consumer sentiment figures for September will also influence.

Away from the economic calendar, Brexit will continue to be an area of focus as will be chatter from Capitol Hill.

The Futures

In the futures markets, at the time of writing, the Dow was down by 76 points, while the DAX was up by 8 points.

For a look at all of today’s economic events, check out our economic calendar.

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