A lack of stats leaves the markets to focus on FED Chair Powell's testimony to Congress tomorrow and geopolitical risk, which could test the majors.
The majors saw red on Monday. Following on from Friday’s pullback, the DAX ended the day down by 0.2%. While the CAC slipped by just 0.08%, the EuroStoxx600 led the way down, falling by 0.21%.
In the U.S, things were not much better with the NASDAQ falling by 0.78% on the day. The Dow and S&P500 also saw red, falling by 0.43% and 0.48% respectively.
Economic data out of the Eurozone was on the lighter side on the day.
German industrial production and trade figures for May provided direction going into the market open.
Industrial production rose by 0.3% in May, month-on-month, partially reversing a revised 2.0% slide in April. Economists had forecast a 0.4% rise.
According to figures released by Destatis,
The trade surplus widened from €17.0bn to €18.7bn in May. Economists forecasted for the trade surplus to hold steady at €17.0bn
According to the figures released by Destatis,
There were no material stats out of the U.S to influence the majors on the day.
On the monetary policy front, last week’s U.S nonfarm payroll figures continued to raise doubts over a FED rate cut later in the month.
The markets will need to wait until tomorrow, where FED Chair Powell will deliver testimony to Congress. Powell is scheduled to speak later today but may hold back on any chatter on policy ahead of Wednesday’s testimony.
Ahead of the European open, the Asian majors saw red to set the tone on the day.
From the DAX, Deutsche Bank led the way down on the day, sliding by 5.9%. The bank’s restructuring plans did the damage on the day, as the markets responded to the bank’s decision to move away from core businesses.
Commerzbank Joined Deutsche in the red, sliding by 3.57% as the banking sector came under fire at the start of the week.
Things were not much better for the auto sector. While Volkswagen ended a 2nd consecutive day unchanged, the rest were in the red.
Daimler saw the heaviest losses, falling by 1.46%. Continental and BMW ended the day down by 0.76% and by 0.87% respectively.
From the CAC, BNP Paribas fell by 1%, with Credit Agricole ending the day down by 1.39%. Renault also saw red, falling by 1.9%.
It’s a quiet day ahead, with no material stats due out of the Eurozone.
The lack of stats will leave market sentiment towards FED and ECB monetary policy to provide direction ahead of FED Chair Powell’s testimony to Congress tomorrow.
While the focus is on tomorrow’s testimony, it remains to be seen whether Powell will provide the markets with any forward guidance in a scheduled speech later today. The FED Chair is due to speak on stress testing at the Federal Reserve Board Conference.
Ahead of the European open, it was a mixed start to the day in the Asian markets, with the Nikkei up by 0.61%, while the ASX200 was down by 0.1%.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.