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European Equities: Private Sector PMIs and FED Chair Powell Testimony in Focus

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·5-min read
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Economic Calendar

Wednesday, 1st December

German Retail Sales (MoM) (Oct)

Spanish Manufacturing PMI (Nov)

Italian Manufacturing PMI (Nov)

French Manufacturing PMI (Nov) Final

German Manufacturing PMI (Nov) Final

Eurozone Manufacturing PMI (Nov) Final

Thursday, 2nd December

Eurozone Unemployment Rate (Oct)

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 Tuesday, with Monday’s modest gains reversed with interest.

The EuroStoxx600 and CAC40 fell by 0.92% and by 0.81% respectively, with the DAX30 ending the day down by 1.18%.

Better than expected economic data from China failed to provide the majors with support. A marked pickup in inflationary pressure across the Eurozone overshadowed the better-than-expected numbers.

In November, the NBS Manufacturing PMI rose from 49.2 to 50.1, while the Non-Manufacturing PMI slipped from 52.4 to 52.3.

Key to the sell-off on Tuesday were comments from Moderna CEO Stephane Bancel and FED Chair Powell’s testimony.

Moderna’s CEO stated, early in the day, on the likely reduced efficacy of vaccines against the omicron strain.

Late in the session, FED Chair Powell added to the market angst. Powell talked of a possible speedier tightening of monetary policy in relation to the bond buying program.

The Stats

It was another busy economic calendar this morning. Member state and Eurozone inflation figures were in focus along with French consumer spending and German unemployment. 3rd quarter GDP numbers from France also garnered interest.

French Economy

In the 3rd quarter, the French economy expanded by 3% in the 3rd quarter, which was in line with prelim figures. In the 2nd quarter, the economy had expanded by 1.3%.

Consumer prices were on the rise once more, according to prelim figures. In November, France’s annual rate of inflation picked up from 2.6% to 2.8%. Month-on-month, consumer prices rose by 0.4% off the back of a 0.4% increase in October.

According to,

  • Energy prices were up 21.6% year-on-year, driving inflation further northwards.

  • There was also an increase in prices for food (+0.4%).

  • Prices for manufactured products increased by 0.8% and for services by 1.9%.

While inflationary pressures continued to build, consumer spending was in the decline. In October, consumer spending decreased by 0.4%, reversing a 0.2% rise from September.

German Economy

In November, Germany’s unemployment rate fell from 5.4% to 5.3%, supported by a 34k decline in unemployment. In October, there had been a 39k fall in the number of unemployed.

Eurozone Inflation

For the Eurozone, the annual rate of inflation picked up from 4.1% to 4.9% according to prelim figures for November. Month-on-month, consumer prices rose by 0.7% after having increased by 0.7% in October.

According to Eurostat,

  • Energy is expected to have the highest annual rate in November (27.4% compared with 23.7% in October).

  • Services is expected to have an annual rate of 2.7%, up from 2.1% from October.

  • Non-energy industrial goods saw a pickup from 2.0% to 2.4% with food, alcohol, & tobacco up from 1.9% to 2.2%.

From the U.S

Consumer confidence was in focus ahead of FED Chair Powell testimony.

In November, the CB Consumer Confidence Index fell from a downwardly revised 111.6 to 109.5. Economists had forecast a decline to 111.0.

On the monetary policy front, FED Chair Powell talked of a likely discussion in the next FOMC meeting vis-à-vis speeding up the planned tapering of bond purchases. Such an outcome would bring forward a shift in policy on interest rates.

The FED Chair also acknowledged that the pickup in inflation could no longer be described as transitory.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. BMW and Volkswagen fell by 0.67% and by 1.60% respectively. Continental rallied by 2.06% however, with Daimler ending the day up by 0.42%.

It was also a mixed day for the banks. Deutsche Bank rose by 0.14%, while Commerzbank ended the day flat.

From the CAC, it was a mixed day for the banks. Soc Gen rose by 0.22%, while Credit Agricole and BNP Paribas both saw losses of 0.54% respectively.

The French auto sector had a bearish session. Stellantis NV slid by 3.64%, with Renault ending the day down by 2.35%.

Air France-KLM and Airbus SE fell by 2.88% and by 0.97% respectively.

On the VIX Index

It was back into the green for the VIX on Tuesday, as the U.S equity markets hit reverse once more.

Partially reversing a 19.78% slide from Monday, the VIX rose by 18.42% to end the day at 27.19.

The NASDAQ fell by 1.55%, with the Dow and the S&P500 seeing losses of 1.86% and 1.90% respectively.

The Day Ahead

It’s another busy day ahead on the Eurozone’s economic calendar. German retail sales and manufacturing PMIs are due out later today. Barring revisions to PMIs for France and Germany, Italy and the Eurozone’s PMIs will likely have the greatest impact alongside Germany’s retail sales numbers.

From the U.S, ADP nonfarm employment change and ISM Manufacturing PMI figures will also influence later in the session. On the monetary policy front, FED Chair Powell will also be delivering a 2nd day of testimony.

Away from the economic calendar, however, COVID-19 news will need continued monitoring.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 113 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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