Bearish weekend for European majors on Friday, EuroStoxx600 turning red for the 2sd time in 8 sessions.
The CAC40 fell 0.42%, with the DAX30 and EuroStoxx600 posting losses of 0.38% and 0.33% respectively.
A relatively calm economic calendar has left markets in the hands of market sentiment towards inflation and COVID-19 news updates.
The decline over the weekend came despite continued assurances from ECB President Lagarde of unwavering political support.
The news of Austria and other EU member states facing a further rise in the number of new COVID-19 cases has led the Austrian government to take action to reduce the number of rising cases.
At the start of the week, Austria had imposed containment measures for those who had not been vaccinated. At the end of the week, however, the government imposed a full lockdown.
Germany has also spoken of new restrictions after introducing restrictions for unvaccinated people.
In October, German producer prices for industrial products jumped 3.8% against the expected 2.3%. The PPI rose 1.4% in September.
Germany’s annual wholesale inflation rate accelerated from 14.2% to 18.4%. Economists expected 15.7%.
According to Destatis,
- Energy prices as a whole are up 48.2% from October-2021 and 12.1% from September-2021.
- Natural gas jumped 81.4% year-over-year and electricity jumped 49.6%, pushing prices higher from October 2020.
- Excluding energy, the index was up 9.2% in October 2020.
- Prices of intermediate goods increased 18.1% from Oct-2020 and 0.9% from Sep-2021.
- For durable consumer goods, prices increased by 3.4% compared to October 2020.
- Prices for non-durable goods increased 3.0% from October 2020 and 0.5% month on month.
ECB President Lagarde
On the monetary policy front, ECB President Lagarde delivered a speech at the 31st European Banking Congress in Frankfurt.
As in the speeches at the start of the week, the President of the ECB has ensured unwavering political support.
See here for the content of the speech by ECB President Lagarde.
The United States
There were no important statistics to provide the majors with direction later in the European session.
For the DAX: It was a bearish day for the auto sector on Friday. Volkswagen slipped 2.59%, with Continental end the day down 1.38%. Daimler and Bmw experienced relatively modest losses of 1.05% and 0.87% respectively.
It was also a bearish day for the banks. German Bank and Commerzbank ended the day down 4.62% and 3.77% respectively.
From CAC, it was a bearish day for the banks. BNP Paribas decreased by 3.02%, with Gen Soc and Agricultural credit 2.53% and 1.36% respectively.
The French automotive sector has also suffered. Stellantis SA and Renault ended the day with losses of 2.51% and 3.94% respectively.
Air France-KLM fell by 1.15%, with Airbus SE sliding 3.41%.
On the VIX index
It was a 3e consecutive day in the green for the VIX Friday.
After gaining 2.81% on Thursday, the VIX rose 1.82% to end the day at 17.91.
The NASDAQ rose 0.40%, while the Dow Jones and the S & P500 posted losses of 0.75% and 0.14% respectively.