European Equities: A Busy Economic Calendar and Geopolitics to Drive the Majors
Economic Calendar:
Wednesday, 30th September
German Retail Sales (MoM) (Aug)
French Consumer Spending (MoM) (Aug)
French CPI (MoM) September Prelim
French HICP (MoM) September Prelim
German Unemployment Change (Sep)
German Unemployment Rate (Sep)
Italian CPI (MoM) September Prelim
Eurozone Core CPI (YoY) September Prelim
Eurozone CPI (YoY) September Prelim
Thursday, 1st October
Spanish Manufacturing PMI (Sep)
Italian Manufacturing PMI (Sep)
French Manufacturing PMI (Sep) Final
German Manufacturing PMI (Sep) Final
Eurozone Manufacturing PMI (Sep) Final
Eurozone Unemployment Rate (Aug)
EU Leaders Summit
The Majors
It was a relatively bearish day for the European majors on Tuesday. Following Monday’s breakout, investors locked in profits ahead of a hectic Wednesday.
Uncertainty ahead of the 1st presidential debate had the majors on the defensive. The debate is scheduled to take place in the early hours of Wednesday morning, European time. Adding to the market angst on the day was the resumption of Brexit negotiations. Ahead of talks, both sides remained some way off from an agreement.
Economic data from the Eurozone had a muted impact, with inflation figures from Germany and Spain sending mixed signals.
While caution was the name of the game, news of progress towards the stalled COVID-19 relief Bill had limited the downside.
On Tuesday, the EuroStoxx600 fell by 0.52% to lead the way down. The CAC40 and DAX30 weren’t far behind, with losses of 0.23% and 0.35% respectively.
The Stats
It was a relatively quiet day on the Eurozone economic calendar. Key stats included September’s prelim inflation figures for Germany and Spain.
Spain
According to prelim figures, Spain saw deflationary pressures ease marginally in September. Consumer prices fell by 0.4%, year-on-year, following a 0.5% decline in August. Economists had forecast a decline of 0.5%.
By contrast, the harmonized consumer price index fell by 0.6%, following a 0.6% decline in August. Economists had forecast a 0.5% fall.
Germany
German consumer prices fell by 0.2% in September, month-on-month, following a 0.1% decline in August. Economists had forecast a 0.1% decline.
According to Destatis,
Year-on-year, consumer prices fell by 0.2% after having stalled in August. Economists had forecasted a 0.1% decline.
The Eurozone
From the Eurozone, the consumer confidence indicator came in at -13.9 according to finalized figures. This was in line with prelim and forecasts. In August, the indicator had stood at -14.7.
From the U.S
It was a busier day on the economic calendar, with the stats preceding the first of the 2020 presidential debates.
Economic data included July house price figures, August trade data, and consumer confidence figures for September.
In August, the U.S goods trade deficit widened from $80.11bn to $82.94bn. The widening came in spite of Trump continuing to put pressure on China to ramp up imports.
In spite of the widening, the data had a muted impact on the majors, however. House price figures for July also had a muted impact on the day.
Later in the session, however, consumer confidence was in focus. The CB Consumer Confidence Index jumped from 86.3 to 101.8. Economists had forecast a rise to 89.2. While the rebound didn’t return the index to March levels, it was a solid rebound in spite of plenty of economic uncertainties.
The Market Movers
For the DAX: It was a mixed day for the auto sector on Tuesday. BMW and Continental rose by 0.64% and by 0.04% respectively. Daimler and Volkswagen saw red, however, falling by 0.49% and by 0.32% respectively.
It was a bearish day for the bank. Deutsche Bank and Commerzbank fell by 2.67% and by 2.82% respectively.
From the CAC, bank stocks were back in the red. Soc Gen slid by 3.7%, with BNP Paribas and Credit Agricole ending the day down by 2.59% and by 2.32% respectively.
It was also a bearish day for the French auto sector. Peugeot and Renault slid by 3.19% and by 3.72% respectively.
Air France-KLM resumed its downward trend, falling by 2.79%, while Airbus SE rose by 0.45%.
On the VIX Index
A run of 3 consecutive days in the red came to an end for the VIX on Tuesday. Partially reversing a 0.72% decline from Monday, the VIX rose by 0.31% to end the day at 26.27.
Progress towards a relief Bill on Capitol Hill limited the downside as investors looked ahead to the 1st presidential debate.
The Dow and S&P500 both fell by 0.48%, with the NASDAQ ending the day down by 0.29%.
The Day Ahead
It’s a particularly busy day ahead on the Eurozone economic calendar.
On the economic data front, stats from China will set the tone ahead of the European session.
The focus will then shift to French and German retail sales figures and unemployment figures for Germany.
Ahead of economic data from the U.S, inflation figures for France, Italy, and the Eurozone will also influence.
In a busy European session, retail sales and unemployment figures will likely garner the greatest interest, however.
From the U.S, it’s also a busy day ahead. Key stats include finalized 2nd quarter GDP numbers and Chicago’s PMI for September.
Of greater influence, however, will be September’s ADP non-farm employment change figures.
Away from the economic calendar, there is also plenty for the markets to consider.
Market reaction to the first presidential debate may well overshadow any stats ahead of the U.S open.
Later in the day, Brexit updates, progress towards a COVID-19 relief Bill, and further market reaction to the debate will influence.
The Futures
In the futures markets, at the time of writing, the Dow was up by 14 points, with the DAX up by 21 points.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
