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European Equities: COVID-19 News and Member State Inflation in Focus

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·4 min read
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  • ^FCHI
  • ^GDAXI

Economic Calendar

Monday, 29th November

Spanish HICP (YoY) (Nov) Prelim

Spanish CPI (YoY) (Oct) Prelim

German CPI (MoM) (Nov) Prelim

Tuesday, 30th November

French Consumer Spending (MoM) (Oct)

French GDP (QoQ) (Q3)

French CPI m/m (Nov) Prelim

French HICP m/m (Nov) Prelim

German Unemployment Change (Nov)

German Unemployment Rate (Nov)

Italian CPI (MoM) (Nov) Prelim

Eurozone CPI (YoY) (Nov) Prelim

Wednesday, 1st December

German Retail Sales (MoM) (Oct)

Spanish Manufacturing PMI (Nov)

Italian Manufacturing PMI (Nov)

French Manufacturing PMI (Nov) Final

German Manufacturing PMI (Nov) Final

Eurozone Manufacturing PMI (Nov) Final

Thursday, 2nd December

Eurozone Unemployment Rate (Oct)

Friday, 3rd December

Spanish Services PMI (Nov)

Italian Services PMI (Nov)

French Services PMI (Nov) Final

German Services PMI (Nov) Final

Eurozone Markit Composite PMI (Nov) Final

Eurozone Services PMI (Nov) Final

Eurozone Retail Sales (MoM) (Oct)

The Majors

It was a particularly bearish end to the week for the European majors on Friday.

The DAX30 and CAC40 slid by 4.15% and by 4.75% respectively, with the EuroStoxx600 ending the day down by 3.67%.

Economic data and market sentiment towards inflation and monetary policy took a back seat on Friday.

News of a new COVID-19 strain and government plans to contain the spread of the more virulent strain from South Africa by border controls left the majors in the deep red.

The Stats

Following a string of stats from Germany, French consumers and Italian businesses were in focus this morning.

French Consumer Confidence

In November, French Consumer Confidence held steady at 99 versus a forecasted decline to 98. The numbers were steady in spite of a marked deterioration in confidence in Germany and across the euro bloc.

According to insee.fr,

  • Households’ opinions related to their past financial situation has decreased by 3-points.

  • Also in decline was households’ opinion in relation to their future personal financial situation, which slipped by 1 point.

  • Households’ opinion related to their future saving capacity bounced by 10 points, however, returning to its September level.

  • With regards to the households’ opinion balance about the opportunity to save, the balance remained stable as did the one relative to their current saving capacity.

  • Positive was a fall in unemployment fears, which declined by 6 points.

  • By contrast, the share of households considering that prices were on the rise during the past 12-months rose by 9 points to its highest level since 2012.

Interestingly, households considering that prices will be on the rise during the next 12-months fell by 13 points.

Italian Business and Consumer Confidence

While French consumer confidence held steady, consumer confidence in Italy weakened slightly from 118.4 to 117.5. By contrast, however, business confidence picked up from 115.1 to 116.0.

From the U.S

There were no major stats to consider, with the U.S markets on a shortened session.

The Market Movers

For the DAX: It was a particularly bearish day for the auto sector on Friday. BMW and Continental both slid by 6.25% to lead the way down, with Daimler ended the day down by 6.16%. Volkswagen fell by a more modest 5.34%.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank saw losses of 6.69% and 5.58% respectively.

From the CAC, it was a bearish day for the banks. Soc Gen slid by 7.06, with Credit Agricole and BNP Paribas seeing losses of 4.39% and 5.86% respectively.

The French auto sector also had a bearish session. Stellantis NV fell by 6.84%, with Renault ending the day down by 7.8%.

Air France-KLM and Airbus SE led the way down, however, tumbling by 9.67% and by 11.49% respectively.

On the VIX Index

It was a shortened U.S session, with market reaction to COVID-19 news leading to a spike in the VIX.

Reversing a 4.13% fall from Wednesday, the VIX surged by 54.04% to end the day at 28.62.

The Dow slid by 2.53%, with the NASDAQ and the S&P500 seeing losses of 2.23% and 2.27% respectively.

The Day Ahead

It’s a relatively busy day ahead on the Eurozone’s economic calendar. Prelim November inflation figures for Spain and Germany will be in focus later today.

With plenty of market sensitivity to inflation, expect a responsive EUR.

From the U.S, there are no major stats to provide direction, leaving the majors in the hands of central bank chatter later in the day.

Away from the economic calendar, however, COVID-19 news will remain the key driver.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 166 points and the DAX by 157 points.

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

This article was originally posted on FX Empire