European Equities: Economic Data and COVID-19 in Focus


Monday, 1st February

German Retail Sales (MoM) (Dec)

Spanish Manufacturing PMI (Jan)

Italian Manufacturing PMI (Jan)

French Manufacturing PMI (Jan) Final

German Manufacturing PMI (Jan) Final

Eurozone Manufacturing PMI (Jan) Final

Eurozone Unemployment Rate (Dec)

Tuesday, 2nd February

Eurozone GDP y/y (Q4) 1st Estimate

Eurozone GDP q/q (Q4) 1st Estimate

Wednesday, 3rd February

Spanish Services PMI (Jan)

Italian Services PMI (Jan)

French Services PMI (Jan) Final

German Services PMI (Jan) Final

Eurozone Markit Composite PMI (Jan) Final

Eurozone Services PMI (Jan) Final

Italian CPI (MoM) (Jan) Prelim

Eurozone CPI (YoY) (Jan) Prelim

Eurozone Core CPI (YoY) (Jan) Prelim

Eurozone CPI m/m (Jan) Prelim

Thursday, 4th February

IHS Markit Construction PMI (Jan)

ECB Economic Bulletin

Eurozone Retail Sales (MoM) (Dec)

Friday, 5th February

German Factory Orders (MoM) (Dec)

French Non-Farm Payrolls (QoQ) (Q4)

The Majors

It was a bearish end to the week for the European majors on Friday. The CAC40 slid by 2.02%, with the DAX30 and the EuroStoxx600 falling by 1.71% and by 1.87% respectively.

Economic data from France, Germany, and Spain failed to support the European majors on the day.

Concerns over vaccine supply shortages across the EU and low vaccination rates weighed on riskier assets.

Supply issues faced by the EU could further delay any economic recovery. New strains of the virus have also forced governments to introduce stricter containment measures.

The Stats

It was a busy day on the economic calendar. 4th quarter GDP figures for France, Germany, and Spain were key stats on the day.

French consumer spending and German unemployment numbers, together with Spanish inflation figures were also in focus.

The stats were skewed to the positive, with both Germany and Spain avoiding economic contractions in the 4th quarter.

Germany’s economy expanded by 0.1%, with Spain’s economy expanding by 0.4%. France’s economy struggled, however, with the economy contracting by 1.3%.

At the end of the year, French consumer spending jumped by 23%, reversing an 18.9% slump from November.

German unemployment fell by a further 41k in January, following a 40k decline in December, to leave the unemployment rate at 6.0%.

From the U.S

It was a busier day on the U.S economic calendar.

Personal spending, inflation, and Chicago PMI figures were in focus.

The stats were also skewed to the positive but also failed to support the European majors on the day.

Personal spending fell by a further 0.2%, following a 0.7% decline in November. Economists had forecasted a 0.4% decline.

Inflationary pressures picked up at the end of the year. The annual rate of core inflation rose from 1.4% to 1.5%.

For January, Chicago’s PMI jumped from 59.5 to 63.8, supporting a rosier outlook for the manufacturing sector.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Friday. Volkswagen slid by 1.84%, with BMW and Daimler falling by 1.38% and by 1.59% respectively. Continental saw a more modest 0.04% loss on the day.

It was a particularly bearish day for the banks. Deutsche Bank and Commerzbank slid by 3.42% and by 4.76% respectively. Concerns over the economic outlook weighed on the sector.

From the CAC, it was a bearish day for the banks. BNP Paribas slid by 3.46%, with Credit Agricole and Soc Gen falling by 1.99% and by 2.11% respectively.

It was also a bearish day for the French auto sector. Stellantis NV fell by 1.36%, with Renault ending the day with a modest 0.45% loss.

Air France-KLM and Airbus SE ended the day down by 2.89% and by 2.29% respectively.

On the VIX Index

It was back into the green for the VIX on Friday. Partially reversing an 18.81% slide from Thursday, the VIX rose by 9.53% to end the day at 33.09.

The Dow and the NASDAQ slid by 2.03% and by 2.00% respectively, with the S&P500 rose falling by 1.93%.

The Day Ahead

It’s a busy day ahead on the European economic calendar. January manufacturing sector PMIs for Italy and Spain are due out. Finalized PMIs for France, Germany, and the Eurozone are also scheduled for release.

Barring marked deviation from prelim figures, expect Italy and the Eurozone’s PMI figures to have the greatest impact.

German retail sales figures and the Eurozone’s unemployment rate for December will also be in focus.

Germany’s retail sales figures will draw some interest, though with lockdown measures in effect through January, any impact would likely be minimal.

From the U.S, ISM Manufacturing PMI figures for January will likely influence late in the session.

Ahead of the open, however, China’s Caixin Manufacturing PMI will set the tone.

January’s NBS Manufacturing PMI fell from 51.9 to 51.3, with the non-manufacturing PMI sliding from 55.7 to 52.4. The figures from Sunday will likely test support for riskier assets ahead of the Caixin figure.

Away from the economic calendar, COVID-19 news and chatter from Capitol Hill will remain key drivers.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 119 points, with the DAX30 down by 18 points.

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

This article was originally posted on FX Empire