France economy

A week in review – 10/15/21


Major

It was another bullish week for the majors in the week ending the 15the October. EuroStoxx600 rebounded 2.65%, with the DAX30 and CAC40 ending the week with gains of 2.51% and 2.55% respectively.

Disappointing eurozone economic data took a back seat, with optimism over corporate earnings providing support.

In the United States, economic data was also favorable for the market despite persistent inflationary pressures at the end of the 3rd trimester.

China’s economic data rose further as exports rebounded to support a widening trade surplus.

Statistics

Earlier this week, the ZEW economic sentiment figures for Germany and the eurozone were disappointing.

The German ZEW economic sentiment index fell from 26.5 to 22.3, that of the euro zone from 31.1 to 21.0.

For the euro area, industrial production and trade data were also weaker.

In August, industrial production fell 1.6%, reversing a 1.5% increase from the previous month.

On the trade front, the euro zone’s trade surplus fell from € 20.7 billion to € 4.8 billion.

The United States

At the start of the week, job vacancies and inflation were at the center of the concerns.

After weaker-than-expected NFP figures the week before, JOLT’s vacancies fell from 11.098 million to 10.439 million in August.

However, the inflation figures were more important.

The annual core inflation rate held steady at 4.0% in September, as underlying consumer prices rose 0.2% on the month. Consumer prices rose 0.4% after rising 0.3% in August.

Midweek, the minutes of the FOMC meeting had few surprises before a busy weekend.

On Thursday, the first jobless claims impressed. In the week ending 8the October, jobless claims fell from 329k to 293k.

Retail sales figures were also better than expected. In September, core retail sales rose 0.8%, with retail sales up 0.7%. Although better than expected, sales were weaker than in August.

Negative for the dollar, however, was weaker consumer sentiment. In October, Michigan’s consumer sentiment index fell from 72.8 to 71.4.

Market movers

From DAX, it was a bullish week for the automotive sector. Volkswagen rebounded 4.71% to lead the way, with Daimler end the week up 3.64%. Bmw and Continental were not far behind, with gains of 3.48% and 3.21%.

It was, however, a bearish week for the banking sector. German Bank and Commercial bank ended the week down 0.44% and 2.56% respectively.

From CAC, it was a bullish week for the banks. Gen Soc and BNP Paribas led the way with gains of 1.91% and 1.32%. Agricultural credit ended the week with a more modest increase of 0.16%.

It was a bullish week for the French automotive sector. Stellantis SA increased by 2.00%, with Renault up 5.66%.

Air France-KLM rebounded with a gain of 4.02%, with Airbus end the week up 1.48%.

On the VIX index

It was a second consecutive week in the red for the VIX in the week ending the 15the October.

After falling 11.25% from the previous week, the VIX slipped 13.16% to end the week at 4:30 p.m.

4 days in the green from 5 sessions, which included a 9.55% slide on Thursday, delivered the setback of the week.

Over the week, the NASDAQ rebounded 2.18%, with the Dow Jones and the S & P500 ending the week up 1.58% and 1.82% respectively.

The coming week

It’s another relatively quiet week ahead on the economic calendar.

At the start of the week, the final inflation figures for the euro zone will be the center of attention. Unless there are sharp revisions, we don’t expect the numbers to influence.

Thursday’s flash consumer confidence figures for October will grab attention ahead of private sector PMIs on Friday.

Friday’s preliminary PMIs for France, Germany and the eurozone will be key. Concerns about inflation and the economic outlook will give the statistics a lot of influence.

US economic data includes industrial production, the Philly Fed’s manufacturing PMI, jobless claims, and private sector PMIs.

As industrial production sparks interest, expect PMI figures on jobless claims and the service sector to be key.

From China, 3rd the expected quarterly GDP figures alongside September’s retail sales and industrial production figures will set the tone. The figures are due on Monday.

Outside of the economic calendar, corporate earnings and central bank chatter will also provide direction to the majors.

This item was originally posted on FX Empire

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