European Equities: A Quiet Economic Calendar Leaves Crude Oil and FED Policy in Focus

In January, Germany’s ZEW Economic Sentiment Index jumped from 29.9 to 51.7. Economists had forecast an increase to 32.0. The Eurozone Economic Sentiment Index also impressed, rising from 26.8 to 49.4. Economists had forecast a rise to 29.2.

For Germany, the ZEW Current Conditions Index disappointed, however, falling from -7.4 to -10.2. Economists had forecast a more modest decline to -8.5.

From the U.S

NY Empire State Manufacturing Index slid from 31.9 to -0.70 in January. Economists had forecast a decline to 25.70.

According to the January Survey,

• New orders took a hit, with the new orders index falling 32 points to -5.0.
• The shipments index fell to 1.0, while the delivery times index held steady at 21.6, pointing to a continued lengthening amidst ongoing supply chain disruptions.
• On the inflation front, the prices paid index slipped by 4 points to 76.7, with the prices received index down 8 points to 37.1. Both remained elevated and pointed to “ongoing substantial increases in both input and selling prices”.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Daimler rose by 0.51% to buck the trend. f Continental slid by 1.83%, however, with BMW and Volkswagen ending the day down by 0.08% and by 1.07% respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank declined by 0.77% and by 0.69% respectively.

From the CAC, it was a bearish day for the banks. Credit Agricole fell by 0.44%, with Soc Gen and BNP Paribas seeing losses of 0.09 and 0.06% respectively.

The French auto sector also had a bearish session. Stellantis NV and Renault ended the day down by 0.54% and by 0.79% respectively.

Air France-KLM and Airbus SE fell by 1.09% and by 0.75% respectively.

On the VIX Index

It was back into the green for the VIX on Tuesday.

Reversing a 5.51% fall from Friday, the VIX surged by 18.76% to end the day at 22.79.

The NASDAQ tumbled by 2.60%, with the Dow and the S&P500 seeing losses of 1.51% and 1.84% respectively.

The Day Ahead

It’s a quieter day ahead on the Eurozone’s economic calendar. Finalized German inflation figures for December are due out going into the European open. Barring any marked revisions from prelim, however, we don’t expect the numbers to influence.

From the U.S, housing sector data for December, due out late in the European session, should also have a muted impact on the majors.

The markets will be tracking U.S Treasury yields and crude oil prices for direction.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 52 points.

For a look at all of today’s economic events, check out our economic calendar.