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European Equities: A Busy Economic Calendar and COVID-19 Numbers in Focus

The Futures are pointing to a positive open. Economic data and COVID-19 numbers will need to provide some hope, however, to support a 2nd day in the green.
Bob Mason
Growing Euro notes arrows over the flag of European Union.

Economic Calendar:

Tuesday, 31st March

French Consumer Spending (MoM) (Feb)

German Unemployment Change (Mar)

German Unemployment Rate (Mar)

Spanish GDP (QoQ) (Q4)

Italian CPI (MoM) (Mar) Prelim

Eurozone Core CPI (YoY) (Mar) Prelim

Eurozone CPI (MoM) Prelim

Eurozone CPI (YoY) (Mar) Prelim

Wednesday, 1st April

German Retail Sales (MoM) (Feb)

Spanish Manufacturing PMI (Mar)

Italian Manufacturing PMI (Mar)

French Manufacturing PMI (Mar) Final

German Manufacturing PMI (Mar) Final

Eurozone Manufacturing PMI (Mar) Final

Eurozone Unemployment Rate (Feb) Final

Thursday, 2nd April

Spanish Unemployment Change

Friday, 3rd April

Spanish Services PMI (Mar)

Italian Services PMI (Mar)

French Services PMI (Mar) Final

German Services PMI (Mar) Final

Eurozone Markit Composite PMI (Mar) Final

Eurozone Services PMI (Mar) Final

Eurozone Retail Sales (MoM) (Feb)

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The Majors

It was a bullish start to the week for the European majors, with the DAX30 rising by 1.90% to lead the way. The EuroStoxx600 and CAC40 saw more modest gains of 1.28% and 0.62% respectively.

The gains on the day came in spite of the ECB raising the recession flag. Coronavirus updates from Italy provided support as did early gains from the U.S that contributed to the recovery across the European majors.

There were no stats to distract the markets on the day, leaving the news from Italy to support demand for the majors. In Italy, new cases were up by the lowest number in 2-weeks.

While the majors found support, it worth noting that Italy completed fewer tests as the government prepared to extend the lockdown.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Monday. March prelim inflation figures out of Spain and Germany had a muted impact. Last week, the ECB Economic Bulletin had revised down its inflation forecasts for 2020. With the Eurozone in shutdown mode, softer numbers were of no surprise.

In Spain, the annual rate of inflation softened from 0.7% to 0.1%, with the core annual rate of inflation softening from 0.9% to 0.2%.

Things were not much better out of Germany, with consumer prices rising by just 0.10% in March. In February, consumer prices had risen by 0.4%.

From the U.S, economic data took a back seat once more, with February pending home sales figures of little interest for the markets.

The Market Movers

For the DAX: It was a bullish start to the week for the auto sector. BMW rose by 1.85% to lead the way. Continental, Daimler, and Volkswagen saw more modest gains of 0.72%, 0.22%, and 0.80% respectively.

It was a mixed day for the banks, however. Commerzbank slid by 6.89%, while Deutsche Bank gained 1.48%.

Deutsche Lufthansa struggled on the day, falling by 3.55%.

From the CAC, it was a bearish day for the banks. BNP Paribas slid by 5.44%, with Credit Agricole and Soc Gen falling by 4.40% and by 5.06% respectively.

It was not much better for the auto sector. Peugeot fell by 2.45%, with Renault ending the day down by 4.01%.

Air France-KLM fell by 2.56%, weighed by the prospect of a lengthier shutdown, with Airbus SE sliding by 10.62%.

On the VIX Index

The VIX hit reverse on Monday, sliding by 12.91%. Following a 7.44% gain on Friday, the VIX ended the day at 57.1.

The U.S equity markets were on the rise once more on Monday, with the S&P500 gaining 3.35% on a day when the U.S saw the total number of cases reach 100k.

A race to find a coronavirus vaccine was evident in the moves on the day, with Johnson & Johnson amongst the front runners.

Ultimately, however, the upside came as the U.S administration announced more stringent measures to contain the virus. The markets appeared to warmly receive the decision to extend the containment measures until 30th April.

It wasn’t all plane sailing, however. While Johnson & Johnson rallied by 8%, Boeing slid by 6% to lead the way down on the Dow.

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. German unemployment figures for March will be the key driver on the day. French consumer spending figures for February and 4th GDP numbers out of Spain will likely have a muted impact.

From the Eurozone, prelim March inflation figures should also have a limited influence following last week’s Economic Bulletin.

Later in the day, there should be some market resilience to March consumer confidence numbers out of the U.S.

Ahead of the European open, March private sector PMI numbers out of China supported riskier assets. The Manufacturing PMI jumped from 35.7 to 52.0, with the Services PMI rising from 29.6 to 52.3.

While the stats will matter, the markets will also want to see evidence of a further slowdown in new cases to deliver a 2nd consecutive day in the green.

In the futures markets, at the time of writing, the DAX was up by 154.5 points, with the Dow up by 107 points.

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