European Equities: A Light Calendar Leaves Earnings and Trade in FocusA light economic calendar on the day ahead will leave earnings and any trade war chatter to drive the majors.
Wednesday, 17th July
- Eurozone Core CPI (YoY) (Jun) Final
- Eurozone CPI (YoY) (Jun) Final
- Eurozone CPI (MoM) (Jun) Final
Friday, 19th July
- German PPI (MoM) (Jun)
It was a day in the green for the majors on Tuesday. Leading the way was the CAC40, which rose by 0.65%. The DAX30 and EuroStoxx600, both ended the day up by 0.35%.
The gains came in spite of disappointing economic data out of Europe and positive stats out of the U.S that questioned further the chances of a FED rate cut.
Economic data out of the Eurozone on Tuesday included July ZEW economic sentiment figures for the Eurozone and Germany.
The Eurozone’s May trade figures also provided direction on the day.
Germany’s ZEW Economic Sentiment Index fell from -21.10 to 24.5, with the current conditions index falling from 7.8 to -1.1 in July.
For the Eurozone, the ZEW economic sentiment index rose by -20.20 to -20.30.
On the trade front, the Eurozone’s trade surplus widened from €15.7bn to €23.0bn in May. According to Eurostat,
- Exports of goods to the rest of the world increased by 7.1% compared with May 2018.
- The imports of goods from the rest of the world increased by 4.2% compared with May 2018.
- Intra-euro trade increased by 4.9%, year-on-year.
Out of the U.S, retail sales figures and corporate earnings also influenced on the day.
Retail sales came in ahead of forecasts, with sales rising by 0.4% in June. Core retail sales also rose by 0.4%, month-on-month.
On the negative front, industrial production stalled in May, however.
While the stats provided direction, U.S corporate earnings had the final say on the day.
On the corporate earnings front better than expected earnings from Citigroup and Goldman Sachs provided support.
The Market Movers
From the DAX, Deutsche Bank led the way, gaining 0.55%. Commerzbank had a far better day, however, surging by 2.58%. From the auto sector, it was red for German car manufacturers. BMW led the way down, falling by 0.18%. Volkswagen (-0.14%), Continental (-0.13%), and Daimler (-0.09%) weren’t far behind.
From the CAC, it was a better day for the banking sector. Soc Gen rallied by 1.25%, with Credit Agricole rising by 1% on the day. BNP Paribas was close behind, rising by 0.85%.
The Day Ahead
It’s a quieter day on the economic calendar. Key stats are limited to the Eurozone’s finalized June inflation figures.
Barring an unexpected build-up in inflationary pressures, we would expect the inflation figures to have a muted impact on the majors.
From the U.S session, stats are limited to housing sector figures that will also have a muted impact on the European majors.
U.S corporate earnings will continue to have an influence, with Bank of America the big earnings release of the day.
Ahead of the European open, the Asian markets were mixed at the time of writing. The Hang Seng and CSI300 were down by 0.28% and by 0.05% respectively. The Nikkei and ASX200 were mixed, however. The Nikkei ended the day with a 0.31% loss, while the ASX200 closed out the day up by 0.49%.
At the time of writing, the DAX and CAC were down by 6.5 points and 11.5 respectively, while the Dow Mini was up by 13 points.