European Equities: Prelim Private Sector PMIs for February in Focus


Friday, 19th February

French CPI (MoM) (Jan) Final

French HICP (MoM) (Jan) Final

French Manufacturing PMI (Feb) Prelim

French Services PMI (Feb) Prelim

German Manufacturing PMI (Feb) Prelim

German Services PMI (Feb) Prelim

Italian CPI (MoM) (Jan) Final

Eurozone Manufacturing PMI (Feb) Prelim

Eurozone Markit Composite PMI (Feb) Prelim

Eurozone Services PMI (Feb) Prelim

The Majors

It was a bearish day for the European majors on Thursday. The CAC40 and the EuroStoxx600 fell by 0.65% and by 0.82% respectively, with the DAX30 ending the day down by 0.16%.

Concerns over the possible effects of a return of inflationary pressures continued to weigh on the majors.

Corporate earnings results and economic data added to the downside, as did the ECB monetary policy meeting minutes, in spite of some cautious optimism.

The Stats

It was a relatively quiet day on the economic calendar on Thursday. Consumer confidence figures for the Eurozone were in focus late in the session.

Ahead of the numbers, the ECB Monetary Policy Meeting Minutes also drew attention.

In February, the consumer confidence indicator fell from -13.8 to -14.8.

From the ECB, salient points from the minutes included:

  • Activity in the 4th quarter was likely to have seen a less pronounced decline than had been envisaged in Q4 of 2020.

  • The recent intensification of the pandemic, however, was expected to weigh more heavily on activity in the Q1 of 2020 than had been foreseen earlier.

  • Net-net, developments remained broadly in line with the December baseline projection overall.

  • Members also noted that an extension of the containment measures beyond Q4 of 202 had been incorporated into the December projections.

  • On the downside, however, it was argued that the forecasted fast rebound in growth might be too optimistic.

  • Vaccination roll-outs were proving to be slow. There were also concerns over the spread of new, more virulent, mutations of the virus.

  • It was noted, however, that the economic costs of containment measures were lower than in Spring 2020.

  • While containment measures were stricter, more fiscal support and better adjustments by firms to cope with restrictions softened the blow.

  • Looking ahead, the euro area economic recovery should be supported by favorable financial conditions, an expansionary fiscal stance, and a recovery in demand as restriction measures ease.

  • Members assessed that risks remained tilted to the downside by had become less pronounced.

From the U.S

Key stats included the weekly jobless claims and Philly FED manufacturing PMI numbers.

In the week ending 12th February, initial jobless claims rose from a previous week 848k to 861k, Economists had forecasted a fall to 765k.

The Philly FED Manufacturing PMI fell from 26.5 to 23.1 in February. Economists had forecast a decline to 20.0.

Other stats included housing sector figures that had a muted impact on the majors.

The Market Movers

For the DAX: It was mixed day for the auto sector on Thursday. Daimler and Volkswagen rallied by 2.55% and by 3.99% respectively, while BMW and Continental fell 0.30% and by 0.50% respectively.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 1.37% and by 1.53% respectively.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole fell by 1.21% and by 1.34% respectively, while Soc Gen rose by 0.13%.

It was a bullish day for the French auto sector, however. Stellantis NV and Renault ended the day with gains of 0.76% and 0.79% respectively.

Air France-KLM struggled, falling by 0.29%, while Airbus SE slid by 2.78%, with a fall in operating profit and the withholding of dividends weighing. On the delivery front, Airbus expects deliveries for 2021 to remain at 2020 levels. In 2020, Airbus delivered 566 commercial aircraft, which was down from 863 aircraft from the previous year. For full year 2020 results, please see here.

On the VIX Index

It was a 3rd consecutive day in the green for the VIX on Thursday. Following on from a 0.19% gain on Wednesday, the VIX rose by 4.60% to end the day at 22.49.

The NASDAQ and the S&P500 fell by 0.72% and by 0.44% respectively, with the Dow declining by 0.38%.

The Day Ahead

It’s a particularly busy day ahead on the European economic calendar. Prelim February private sector PMI figures are due out for France, Germany, and for the Eurozone

With containment measures extending into February, the services sector will likely continue to struggle. That means that the manufacturing sector will need to continue to deliver to support the EUR and riskier assets.

From the U.S, February’s prelim private sector PMI numbers will also provide direction later in the day. Expect the service sector PMI numbers to be the key driver late on.

Away from the economic calendar, chatter from Capitol Hill will need continued monitoring.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 32 points.

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

This article was originally posted on FX Empire