European Equities: Unemployment and COVID-19 in Focus ahead of U.S Jobless Claims

The Majors

It was a bullish session for the European majors on Wednesday.

The DAX30 and CAC40 rallied by 2.47% and by 2.39% respectively, with the EuroStoxx600 ending the day up by 1.71%.

Upbeat private sector PMIs and positive economic data from the U.S provided the European majors with support.

The upside came ahead of a late U.S sell-off, however, as the U.S markets responded to news of the Omicron strain reaching the U.S.

The Stats

It was yet another busy economic calendar this morning. German retail sales were in focus along with member state and Eurozone Manufacturing PMIs for November.

German Retail Sales

In October, retail sales fell by 0.3% following a 2.5% slide from September. Economists had forecast a 1.0% increase.

According to Destatis,

• Compared with the pre-crisis month of Feb-2020, however, retail turnover was up 3.5%.
• Year-on-year, however, turnover was down 2.9%, with consumption weighed by delivery bottlenecks in retail trade.

Member State Manufacturing PMIs

Spain’s Manufacturing PMI slipped from 57.4 to 57.1 in November, versus a forecasted rise to 57.9.

In November, Italy’s Manufacturing PMI rose from 61.1 to 62.8 Economists had forecast for the PMI to hold steady at 61.1.

According to finalized figures:

France’s Manufacturing PMI rose from 53.6 to 55.9 which was up from a prelim 54.6.

In November, Germany’s Manufacturing PMI fell from 57.8 to 57.4, which was down from a prelim 57.6.

The Eurozone

According to finalized figures, the Eurozone’s Manufacturing PMI rose from 58.3 to 58.4 in November, which was down from prelim 58.6.

According to the November survey,

• Manufacturing sector growth stabilized following a 4-month slowdown in growth from June’s record expansion.
• Severe supply-related constraints continued to hinder sector activity.
• Consumer goods producers recorded an accelerated expansion, while intermediate and investment goods makers saw growth slow further.
• While at a slower pace, new business continued to rise at a solid clip.
• Average lead times lengthened once more, however.
• Costs rose at the third strongest pace in the series history.
• Output prices, as a result, were raised to the greatest extent since the series began in Nov-2002.

By Country,

• Italy topped the table, with a record PMI high of 62.8 followed by the Netherlands (9-month low 60.7%).
• France sat at the bottom of the table with a 3-month high 55.9.
• While avoiding the bottom, German and Austria saw their respective PMIs fall to 10-month lows, with Spain’s declining to an 8-month low.

From the U.S

ADP nonfarm employment and manufacturing sector figures were in focus.

The Stats

According to the ADP, nonfarm payrolls increased by 534k in November, following a 570k rise in October.

In November, the ISM Manufacturing PMI rose from 60.8 to 61.1 versus a forecasted 61.0.

The Market Movers

For the DAX: It was a particularly bullish day for the auto sector on Wednesday. Daimler led the way, surging by 4.04%. BMW and Volkswagen rallied by 3.83% and by 3.90% respectively, with Continental gaining 3.18%.

It was also a bullish day for the banks. Deutsche Bank rose by 2.14%, with Commerzbank rallying by 3.06%.

From the CAC, it was a bullish day for the banks. Soc Gen rallied by 3.29%, with Credit Agricole and BNP Paribas seeing gains of 1.99% and 2.74% respectively.

The French auto sector was also in recovery mode. Stellantis NV jumped by 5.68%, with Renault ending the day up by 3.06%.

Air France-KLM and Airbus SE ended the day up by 3.35% and by 3.24% respectively.

On the VIX Index

It was a 2^nd consecutive day in the green for the  VIX on Wednesday, as the U.S equity markets responded to news of the new Omicron strain reaching the U.S.

Following an 18.42% jump in Tuesday, the VIX rose by 14.45% to end the day at 31.12. The VIX last visited 30 levels back in March of this year.

The NASDAQ slid by 1.83%, with the Dow and the S&P500 seeing losses of 1.34% and 1.18% respectively.