It’s a busy day ahead for the European majors, with manufacturing sector PMI figures in focus. Economic data from the U.S will also influence late in the day.
Italian Manufacturing PMI (Mar)
French Manufacturing PMI (Mar) Final
German Manufacturing PMI (Mar) Final
Eurozone Manufacturing PMI (Mar) Final
It was a mixed day for the European majors on Wednesday. The DAX30 ended the day flat, while the CAC40 and the EuroStoxx600 fell by 0.34% and by 0.24% respectively.
Economic data from China, the Eurozone, and the U.S were in focus throughout the day.
Away from the economic calendar, however, COVID-19 remained a concern but not enough to drag the majors into the deep red.
It was a busy day on the economic calendar on Wednesday. French consumer spending, German unemployment, and Eurozone inflation figures were in focus.
French Consumer Spending
In the month of February, French consumer spending stalled, following a revised 4.9% slide in January. Economists had forecast a 2% increase.
According to Insee.Fr,
A 3.4% increase in the purchasing of manufactured goods was offset by a 3.1% fall in energy expenditure and a 2.2% decline in food consumption.
Durable goods consumption increased by 2.3%, with clothing and textiles purchases up 15.8%.
Milder temperatures contributed to a 3.5% fall in gas and electricity consumption. Fuel consumption fell by 2.5%.
Inflationary pressures were on the rise in March, according to prelim figures.
According to Insee.Fr, the annual rate of inflation accelerated from 0.6% to 1.1%, supported by a 0.6% increase in consumer prices, month-on-month. Consumer prices had stalled in February.
In March, unemployment fell by 8K, following on from a revised 36k slide in February. Economists had forecast a 13k fall.
Germany’s unemployment rate held steady at 6.0%, which was in line with forecasts.
According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 0.9% to 1.3%, which was in line with forecasts.
In March, Eurozone consumer prices increased by 0.9%, month-on-month, following a 0.2% rise in February.
Core inflationary pressures softened, however, with the core annual rate of inflation softening from 1.1% to 0.9%.
According to Eurostat,
Energy is expected to have the highest annual rate in March (4.3% compared with -1.7% in February).
Prices for services is expected to rise by 1.3% compared with a 1.2% increase in February.
For food, alcohol, & tobacco, however, prices are expected to rise by 1.1% compared with 1.3% in February.
Non-energy industrial goods are also expected to see prices rise at a slower pace in March, 0.3% compared with 1.0%.
Other stats included prelim inflation figures from Italy. These stats had limited impact, however, as the markets awaited the Eurozone’s figures.
From the U.S
Nonfarm payroll figures were in focus late in the European session.
In March, the ADP reported a 517K increase in nonfarm employment, falling marginally short of a forecasted 550k jump.
Chicago PMI figures for March had muted impact on the European majors late in the session. In March, the PMI increased from 59.5 to 66.3. Economists had forecast an increase to 60.7.
Ahead of the European Open
Private sector PMI figures from China set the tone ahead of the European open.
In March, the NBS Manufacturing PMI increased from 50.6 to 51.9, with the Non-Manufacturing PMI rising from 51.4 to 56.3.
The Market Movers
For the DAX: It was a mixed day for the auto sector on Wednesday. Volkswagen fell by 0.93% to buck the trend. BMW and Daimler rose by 0.42% and by 0.62% respectively. Continental ended the day up by a modest 0.09%.
It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 0.89% and by 1.54% respectively.
From the CAC, it was a bearish day for the banks. BNP Paribas fell by 1.42%, with Credit Agricole and Soc Gen seeing losses of 1.08% and 1.11% respectively.
It was also a bearish day for the French auto sector. Stellantis NV slipped by 0.11%, with Renault ended the day down by 1.90%.
Air France-KLM slid by 2.00%, with Airbus SE falling by 1.19%.
On the VIX Index
It was a 2nd consecutive day in the red for the VIX on Wednesday.
Following on from a 5.45% decline on Tuesday, the VIX fell by 1.07% to end the day at 19.40.
The NASDAQ and the S&P500 rose by 1.54% and by 0.36% respectively, while the Dow slipped by 0.26%.
The Day Ahead
It’s another busy prices day ahead on the European economic calendar. Manufacturing PMI figures for Italy and Spain are due out early in the European session.
Finalized PMIs for France, Germany, and the Eurozone are also due out.
Barring marked deviation from prelims, expect Italy and the Eurozone’s Manufacturing PMIs to have the greatest influence.
From the U.S, ISM Manufacturing PMI and weekly jobless claims figures will also be in focus.
Ahead of the European open, manufacturing sector PMI figures for March disappointed. The market’s preferred Caixin Manufacturing PMI fell from 50.9 to 50.6. The decline was modest, however, which limited the damage.
Away from the stats, expect increased sensitivity to any negative news updates on COVID-19 and any pick up in geopolitical risk.
In the futures markets, at the time of writing, the Dow Mini was down by 1 point, while the DAX was up by 19 points.