European Equities: A Fresh Impetus Needs with Stats Unlikely to Influence

A lack of economic data left the majors in the red, as the markets weighed up the impact of the pandemic and the economic outlook.

Ahead of the European open, disappointing trade data from China tested support as protests against racism continued to spread globally.

The Stats

It was a quiet day on the Eurozone economic calendar on Monday. German industrial production figures for April were in focus but had little influence on the majors.

Industrial production tumbled by 17.9% in April, following a 9.2% slide in March. This was the largest decline since records began back in January 1991.

According to Destatis,

• Production in industry excluding energy and construction was down by 22.1%.
• Within industry, the production of intermediate goods decreased by 13.8% and the production of consumer goods by 8.7%.
• The production of capital goods slumped by 35.3%, with the automotive industry seeing an even larger 74.6% decline.
• Outside industry, energy production was down by 7.2% and the production in construction decreased by 4.1%.
• Year-on-year, industrial production fell by 25.3%.

From the U.S

There were no stats from the U.S to provide direction later in the day.

The Market Movers

For the DAX: It was another bullish day for the auto sector on Monday. BMW and Daimler rallied by 3.36% and 3.37% to lead the way. Continental and Volkswagen saw more modest gains of 0.78% and 2.64% respectively.

It was a particularly bullish day for the banks. Deutsche Bank and Commerzbank rallied by 5.39% and by 5.26% respectively.

Deutsche Lufthansa led the way, however, surging by 14.28% off the back of a 5.5% rally on Friday.

From the CAC, it was also a bullish day for the banks. Soc Gen rallied by 5.56%, while BNP Paribas and Credit Agricole saw more modest gains of 0.86% and 2.02% respectively.

The auto sector saw further gains. Peugeot and Renault rose by 0.84% and by 1.64% respectively.

Air France-KLM rallied by 8.51% as EU member states looked to open borders. Airbus SE rose by 1.15% on the day.

On the VIX Index

It was back into the green for the VIX on Monday, which rose by 5.26%. Reversing a 5.00% fall from Friday, the VIX ended the day at 25.81.

There were no stats to influence on the day, leaving the markets in the hands of the news wires. Support for the VIX came from the widespread protests across the U.S.

Once more we saw the VIX rise alongside the U.S equity markets, questioning whether the upward momentum is sustainable.

The S&P500 rose by 1.20%, with the Dow and the NASDAQ ending the day with gains of 1.70% and 1.13% respectively.

Notably, the S&P500 returned to positive territory for 2020 following Monday’s rise.

The Day Ahead

It’s another relatively quiet day ahead on the Eurozone economic calendar. Germany’s April trade data is due out ahead of the European open. Later this morning, 3^rd estimate GDP figures for the Eurozone are also due out.

Once more, we’re not expecting too much influence from the stats…

From the U.S, April’s JOLT’s job openings will also be brushed aside following May’s nonfarm payroll figures and unemployment rate.

Expect any chatter from Beijing or Washington influence, however. That tension continues to linger…

The markets will also be looking beyond Germany for further fiscal measures to combat the COVID-19 economic meltdown.

The Latest Coronavirus Figures

On Monday, the number of new coronavirus cases rose by 102,703 to 7,188,443 On Sunday, the number of new cases had risen by 123,802. The daily increase was lower than Sunday’s rise, while higher than 95,146 new cases from the previous Monday.

Germany, Italy, and Spain reported 783 new cases on Monday, which was up from 610 new cases on Sunday. On the previous Monday, 680 new cases had been reported.

From the U.S, the total number of cases rose by 18,206 to 2,025,655 on Monday. On Sunday, the total number of cases had risen by 20,274. On Monday, 1^st June, a total of 21,287 new cases had been reported.

In the futures markets, at the time of writing, the DAX was up by 15 points, while the Dow was down by 42 points.

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