In This Article:
Economic Calendar:
Thursday, 26th September
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GfK German Consumer Climate (Oct)
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ECB Economic Bulletin
Friday, 27th September
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French Consumer Spending (MoM) (Aug)
The Majors
The European majors struggled once more on Tuesday, with the DAX30 leading the way, falling by 0.29%. It was a more modest 0.04% loss for the CAC40, while the EuroStoxx600 eked out a 0.01% gain.
Gains from most of the day reversed late in the European session as the markets considered economic data and chatter from the UN General Assembly.
On the geopolitical front, news had hit the wires that trade talks would resume in 2-weeks. Following last Friday’s comments, the news had supported the majors early on.
From the General Assembly, however, Trump’s address spooked the markets by stating that he wouldn’t accept a bad deal with China. The U.S president also attacked China for its unfair trade practices. Following last Friday’s comments, Trump also reiterated that he was in no hurry to bring an end to the extended trade war.
For the DAX30, heavier losses came, not just from disappointing stats, but also news of Volkswagen executives being charged with market manipulation.
The Stats
It was a relatively busy day on the Eurozone economic calendar on Tuesday. Economic data included Germany’s Ifo Business Climate Index, Ifo Current Assessment and Business Expectation figures for September.
According to the September Ifo Institute Survey,
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The Ifo Business Climate Index rose from 94.3 to 94.6 in September.
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A better assessment of the current situation provided support in September, the index rising from 97.4 to 98.5.
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In contrast, however, was a further decline in the Business Expectations Index, which fell from 91.3 to 90.8. It was a 4th consecutive monthly decline in the Business Expectations Index.
In the manufacturing sector, the business climate index fell from -6.0 to -6.4.
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Firms were more negative towards ongoing business and more pessimistic towards the coming months.
The services sector business climate index rose from 13.0 to 16.6.
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Both sentiments towards current conditions and towards the next few months provided support.
For trade, the Trade Ifo business climate index fell from -2.4 to -3.7.
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Traders viewed their current situation more negatively and were also more pessimistic towards the next few months.
From the U.S, the CB Consumer Confidence Index slid from a revised 134.2 to 125.1, contributing to the late reversal in Europe. Economists had forecast a decline to 134.1.
The Market Movers
From the DAX, it was another bearish day for the auto sector on Tuesday. Volkswagen and Daimler led the way down with losses of 3.30% and 2.10% respectively. BMW and Continental weren’t with losses of 0.91% and 1.88% respectively.