Wednesday, 30th October
- French GDP (QoQ) (Q3)
- French Consumer Spending (MoM) (Sep)
- Spanish HICP (YoY) (Oct)
- German Unemployment Change & Unemployment Rate (Oct)
- German CPI (MoM) (Oct)
Thursday, 31st October
- German Retail Sales (MoM) (Sep)
- Spanish GDP (QoQ) (Q3)
- Italian CPI (MoM) (Oct)
- Eurozone CPI (YoY) (Oct) Prelim
- Eurozone Unemployment Rate (Sep)
A run of 6 consecutive days in the green came to an end for the DAX30 and EuroStoxx600 on Tuesday.
The DAX30 and EuroStoxx600 fell by 0.02% and 0.16% respectively, while the CAC40 managed to eke out a 0.17% gain.
A lack of economic data from the Eurozone left the markets to focus on corporate earnings and geopolitical risk on the day.
On the corporate earnings front, a mixed bag on the day left the majors relatively flat ahead of the FOMC interest rate decision later today.
Geopolitics also tested the majors on the day, with the UK seemingly on the way to a December general election that brings plenty of uncertainty. On the trade front, news of the U.S looking into whether to further delay the rollout of tariffs on more Chinese goods was also a test.
While progress has been made towards phase 1 of an agreement, the issue of tariffs and impact on the economy remains.
It was another quiet day on the Eurozone economic calendar on Tuesday. There were no material stats from the Eurozone to provide the EUR with direction on the day.
From the U.S, October’s CB Consumer Confidence figures provided direction later in the day. According to the latest Survey,
- The Index slipped marginally from a revised 126.3 to 125.9 in October. Economists had forecast a rise to 128.0.
- Pressure came from the Expectations Index, which fell from 96.8 to 94.9, while the Present Situation Index provided support. The Present Situation Index rose from 170.6 to 172.3 in October.
- While concerns over business conditions and job prospects weighed on the Expectations Index, confidence remained high, supportive of consumer spending.
The Market Movers
For the DAX: It was a mixed day for the auto sector. Daimler bucked the trend on the day, rising by 0.07%. It was bearish for the rest, with Volkswagen falling by 1.01% to lead the way down. Continental and BMW saw more modest losses of 0.64% and 0.31% respectively.
It was also a mixed day for the banks, with Commerzbank rising by 0.41%, whilst Deutsche Bank fell by 0.71%.
From the CAC, it was a day in the red for the banks. BNP Paribas fell by 0.06%, with Credit Agricole and Soc Gen declining by 0.46% and by 0.08% respectively. For the autos, Peugeot rose by 0.24%, while Renault slid by 0.57% on the day.
On the VIX Index
The VIX Index saw green for a 2nd consecutive day, rising by 0.69% on Tuesday. Following on from a 3.64% gain on Monday, the VIX ended the day at 13.2.
It was a relatively non-eventful day, with mixed corporate earnings and softer consumer confidence figures out of the U.S providing support. The prospect of a UK general election that will likely decide the fate of Britain also supported the VIX on the day.
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The Day Ahead
After a quiet start to the week, it’s a busy day ahead on the Eurozone economic calendar. Key stats due out of the Eurozone include French 3rd quarter GDP and September consumer spending figures in the early part of the session.
Out of France, economic growth is expected to slow to 0.2%, quarter-on-quarter, in the 3rd quarter. Anything weaker would certainly catch the markets off-guard…
From Germany, October’s unemployment change figures and the unemployment rate will also influence later in the morning.
Following some concerning news over job losses in Germany of late, any jump in the unemployment rate would pressure the DAX in particularly.
We would expect Spain and Germany’s prelim October inflation figures to have a muted impact on the majors on the day.
Economic data from the U.S will also have an impact on the European majors later in the session. October ADP nonfarm employment change and 3rd quarter GDP numbers are due out ahead of the FED’s interest rate decision and rate statement.
From the corporate earnings calendar, Volkswagen is scheduled to release 3rd quarter results later this morning. Earnings from the U.S will also have an impact, with Apple Inc. and Facebook Inc. due to release earnings later in the day.
With a mass of stats for the majors to consider, geopolitics may take a back seat on the day, barring any major surprises or shocks…
On the monetary policy front, the FED is due to deliver its October interest rate decision and rate statement. While the European markets will have already closed, some caution is to be expected throughout the day.
In the futures market, at the time of writing, the DAX30 was down by 23 points, with the Dow down by 24 points.
This article was originally posted on FX Empire
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