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European Equities: Economic Data from China and Corporate Earnings in Focus

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Economic Calendar

Wednesday, 20th October

German PPI (MoM) (Sep)

Eurozone Core CPI (YoY) (Sep)

Eurozone CPI (MoM) (Sep)

Eurozone CPI (YoY) (Sep)

Thursday, 21st October

GfK German Consumer Climate (Nov)

Eurozone Consumer Confidence (Oct) Flash

Friday, 22nd October

French Manufacturing PMI (Oct) Prelim

French Services PMI (Oct) Prelim

German Manufacturing PMI (Oct) Prelim

German Services PMI (Oct) Prelim

Eurozone Manufacturing PMI (Oct) Prelim

Eurozone Markit Composite PMI (Oct) Prelim

Eurozone Services PMI (Oct) Prelim

The Majors

It was a bullish end to a bullish week for the European majors on Friday.

The DAX30 rose by 0.81%, with the CAC40 and the EuroStoxx600 ending the day up by 0.63% and by 0.74% respectively.

Economic data from the Eurozone was on the lighter side, leaving stats from the U.S and corporate earnings in focus.

From the U.S, while consumer sentiment waned, retail sales was on the rise delivering support to riskier assets.

The numbers eased concerns over the impact of rising consumer prices on spending, with economists having forecasted for retail sales to decline.

Sentiment towards corporate earnings was also market friendly at the end of the week, with optimism muting market jitters over inflation.

The Stats

Finalized inflation figures for France and Italy were in focus ahead of trade data for the Eurozone.

French consumer prices fell by 0.2% in September, which was in line with prelim figures. In August, consumer prices had risen by 0.6%.

Consumer prices in Italy fell by 0.2%, which was down from a prelim 0.1%. In August, consumer prices had risen by 0.4%.

Trade Data

In August, the Eurozone’s trade surplus narrowed from €20.7bn to €4.8bn. Economists had forecast a more modest narrowing to €16.1bn.

From the U.S

Core retail sales increased by 0.8%, following a 2.0% jump in August. In September, retail sales rose by 0.7% off the back of a 0.9% increase in August. Economists had forecast core retail sales to rise by 0.5% and for retail sales to fall by 0.2%.

On the negative, however, was a fall in the Michigan Consumer Sentiment Index from 72.8 to 71.4 in October. Economists had forecast an increase to 73.1.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Friday. Continental rose by 1.44% to lead the way, with Volkswagen and BMW ending the day up by 1.20% and by 1.16% respectively. Daimler ended the day with a more modest 0.68% gain.

It was also a bullish day for the banks. Deutsche Bank rallied by 2.80%, with Commerzbank rising by 0.99%.

From the CAC, it was a bullish day for the banks. Soc Gen rose by 1.77%, with BNP Paribas and Credit Agricole ending the day up by 1.98% and by 2.07% respectively.

It was also a bullish day for the French auto sector. Stellantis NV gained 1.05%, with Renault rallying by 3.49%.

Air France-KLM jumped by 4.64%, with Airbus SE ending the day up by 1.36%.

On the VIX Index

It was a fourth consecutive day in the red for the VIX on Friday, marking an 8th decline from 9-sessions.

Following a 9.28% slide on Thursday, the VIX fell by 3.32% to end the day at 16.30.

The Dow rallied by 1.09%, with the NASDAQ and the S&P500 rising by 0.50% and by 0.75% respectively.

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone’s economic calendar. There were no material stats from the Eurozone to provide the majors with direction.

Late in the day, industrial production figures from the U.S will draw interest.

Ahead of the European open, however, economic data from China will set the tone.

3rd quarter GDP, industrial production, and retail sales figures are due out ahead of the European open.

Away from the economic calendar, central bank chatter and corporate earnings will also influence.

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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