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European Equities: Service Sector PMIs and U.S Nonfarm Payrolls in Focus

·4 minuto per la lettura

Economic Calendar

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 bearish session for the European majors on Thursday.

The DAX30 and CAC40 fell by 1.35% and by 1.25% respectively, with the EuroStoxx600 ending the day down by 1.15%.

Market reaction to the news of the Omicron strain reaching the U.S weighed heavily on the European majors going into the open.

Economic data from the Eurozone and the U.S failed to deliver support, with Eurozone wholesale inflationary pressures accelerating in October. Adding to the downside was news from EU member states and the U.S of measures to contain the spread of the new strain. Germany and the U.S were amongst countries to reintroduce measures this week.

The Stats

It was a relatively quiet day on the Eurozone economic calendar. Stats were limited to unemployment and wholesale inflation figures for the Eurozone.

In October, the Eurozone’s unemployment rate fell from 7.4% to 7.3%, which was in line with forecasts. The unemployment rate had stood at 8.4% in Oct-2020.

According to Eurostat,

  • Compared with Oct-2020, the number of unemployed declined by 1.564m.

Wholesale inflation figures for the Eurozone drew greater interest today, however.

In October, the Eurozone’s annual wholesale rate of inflation accelerated from 16.1% to 21.9%. Month-on-month, industrial producer prices rose by 5.4%. Producer prices had risen by 2.8% in September.

According to Destatis,

Compared with Sep-2021:

  • Industrial producer prices in the energy sector jumped by 16.8% and by 1.4% for intermediate goods.

  • Prices for durable and non-durable goods rose by 0.5% and by 0.4% for capital goods.

  • Prices in total industry excluding energy increased by just 0.8%.

By member state, Belgium (+11.2%) recorded the highest increase, followed by Italy (+9.4%).

Compared with Oct-2020:

  • Industrial producer prices in the energy sector rose by 62.5% and by 16.8% for intermediate goods.

  • Prices in total industry excluding energy increased by 8.9%.

From the U.S

Jobless claims were in focus later in the European session.

In the week ending 26th November, initial jobless claims rose from a downwardly revised 194k to 222k.

While initial jobless claims rose back above the 200k mark, continuous jobless claims fell from 2,063k to 1,956k. The fall to sub-2,000 was the first since March 2020, when continuous jobless claims had stood at 1,803k on 20th March.

Continuous jobless claims had peaked at 25,073k back in May 2020.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. Continental led the way down, sliding by 2.18%. Daimler and Volkswagen fell by 0.61% and by 0.99% respectively, with BMW ending the day down by 0.28%.

It was a mixed day for the banks, however. Deutsche Bank rose by 0.55%, while Commerzbank fell by 0.39%.

From the CAC, it was also a mixed day for the banks. Soc Gen gained 0.23%, while Credit Agricole and BNP Paribas saw losses of 0.13% and 0.25% respectively.

The French auto sector had a mixed session. Stellantis NV rose by 0.37%, while Renault ended the day down by 1.01%.

Air France-KLM and Airbus SE fell by 1.16% and by 0.80% respectively.

On the VIX Index

It was a back into the red for the VIX on Thursday, as the U.S equity markets bounced back from Wednesday’s sell-off.

Partially reversing a 14.45% gain from Wednesday, the VIX fell by 10.19% to end the day at 27.95.

The NASDAQ rose by 0.83%, with the Dow and the S&P500 seeing gains of 1.82% and 1.42% respectively.

The Day Ahead

It’s a busy day ahead on the Eurozone’s economic calendar. Member state and Eurozone service and composite PMIs for November will be in focus along with Eurozone retail sales figures.

Barring marked revisions from prelims for France and Germany, expect the Eurozone’s composite and retail sales figures to have the greatest impact.

From the U.S, nonfarm payrolls and ISM Non-Manufacturing PMI numbers for November will likely be the key drivers.

Away from the economic calendar, news updates on COVID-19 and the latest variant will also continue to influence, however. Downside risks remain, with the markets yet to know whether Omicron is vaccine resistant…

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 99 points, while the DAX was down by 245 points.

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

This article was originally posted on FX Empire


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