Equities

Inflation in Focus ahead of next Week’s ECB and FED Policy Decisions

The DAX30 fell by 0.30%, with the CAC40 and EuroStoxx600 ending the day down by 0.09% and by 0.08% respectively.

Upbeat economic data from the U.S failed to deliver support for the majors, with the market focus likely shifting to today’s U.S inflation numbers. Another pickup in inflationary pressure in China, according to data released ahead of the European open, proved to be a test for the majors. In November, China’s annual rate of inflation accelerated from 1.5% to 2.3%.

For the DAX30, a narrowing of the trade surplus in October added to the cautious mood, with uncertainty over the Omicron strain also pegging the majors back.

The Stats

It was a quiet day on the Eurozone economic calendar. German trade data was in focus going into the European open.

In October, Germany’s trade surplus narrowed from a revised €12.9bn to €12.5bn. Economists had forecast a widening to €13.6bn.

According to Destatis,

  • Month-on-month, exports increased by 4.1% and by 8.1% year-on-year.
  • Imports rose by 5.0% month-on-month and by 17.3% year-on-year.
  • In Oct-2020, the trade surplus had stood at €19.7bn.

Trade with EU countries

  • German exports to EU member states increased by 11.6% year-on-year, while imports rose by 14.6%.
  • To the euro area, exports were up 12.8% when compared with Oct-2020. Imports from euro area countries were up 18.8%.
  • Exports to EU countries not belonging to the euro area increased by 9.0%, while imports rose by a more modest 6.0%.

Trade with Non-EU Countries

  • Exports to third countries increased by 4.1% compared with Oct-2020.
  • Imports from third countries was up by 20.4%.

Other Notable Countries

  • Exports to the UK were down 11.5%, with imports from the UK falling by 2.9%.
  • To China, exports rose by 8.5% and by 11.4% to the U.S.

From the U.S

Jobless claims were in focus later in the European session.

In the week ending 3rd December, initial jobless claims fell from 227k to 184k. Economists had forecast a decline to 215k.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Daimler rose by 0.41% to buck the trend. Volkswagen fell by 1.00%, however, with BMW and Continental ending the day down by 0.89% and by 0.94% respectively.

It was also a mixed day for the banks. Deutsche Bank slid by 3.29%, while Commerzbank rose by 0.76%.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole fell by 1.22% and by 0.74% respectively, while Soc Gen rose by 0.12%.

The French auto sector had a bearish session, however. Stellantis NV and Renault ended the day down by 1.94% and by 0.60% respectively.

Air France-KLM and Airbus SE saw losses of 2.14% and 1.64% respectively.

On the VIX Index

It was back into the green for the  VIX on Thursday, ending a 3-day losing streak.

Partially reversing a 9.09% fall on Wednesday, the VIX rose by 8.44% to end the day at 21.58.

The Dow ended the day flat, while the NASDAQ and the S&P500 fell by 1.71% and by 0.72% respectively.


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