European Equities: A Light Economic Calendar Leaves Geopolitics in Focus

The Majors

It was a bullish end to the week for the European majors on Friday. The DAX30 rose by 0.66% to lead the way, with the CAC40 and EuroStoxx600 gaining 0.09% and 0.29% respectively.

Economic data delivered much-needed support on the day, with the European majors recovering from early losses.

Trump’s latest anti-China move had weighed on risk appetite in the early part of the European session. On Thursday night, Trump had announced a ban on transactions with the Chinese owners of TikTok and WeChat apps from late September.

The Stats

It was a quieter day on the Eurozone economic calendar. Key stats included June industrial production and trade data from Germany.

The stats were skewed to the positive, with industrial production jumping by 8.9%, following a 7.4% rise in May.

Trade data also impressed, with Germany’s trade surplus widening from €7.5bn to €14.5bn at the end of the 2^nd quarter.

From the U.S

Economic data included July’s labor market figures. Following better than expected jobless claims figures, July’s labor market numbers delivered riskier assets with further support.

Nonfarm payrolls increased by 1,763k in July, which led to a fall in the unemployment rate from 11.1% to 10.2%.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Friday. Continental and Volkswagen slid by 3.28% and by 1.27% respectively. BMW and Daimler saw more modest losses of 0.38% and 0.58% respectively.

It was a mixed day for the banks, however. Deutsche Bank rose by 0.63%, while Commerzbank fell by 0.58%.

From the CAC, it was also a mixed day for the banks. Credit Agricole rose by 0.14%, while BNP Paribas and Soc Gen declined by 0.99% and by 0.03% respectively.

It was a mixed day for the French auto sector. While Peugeot slipped by 0.14%, Renault ended the day with a 1.29% gain.

Air France-KLM fell by 0.34%, while Airbus SE rose by 1.42% on the day.

On the VIX Index

It was a 6^th consecutive day in the red for the VIX on Friday. Following on from a 1.48% loss on Thursday, the VIX fell by 1.94% to end the day at 22.21.

While lawmakers failed to find an agreement, the better than expected labor market figures delivered support to the U.S equity markets.

Tech stocks struggled, however, as the markets responded to Trump’s latest move against China.

The S&P500 and Dow rose by 0.06% and by 0.17% respectively, while the NASDAQ fell by 0.87%.

The Day Ahead

It’s a quiet day ahead on the Eurozone economic calendar. There are no material stats to provide the European majors with direction on the day.

A lack of stats will leave the majors in the hands of geopolitics and U.S JOLT’s job openings due out late in the European session.

Tensions between the U.S and China and the U.S COVID-19 stimulus package will need monitoring.

The Futures

In the futures markets, at the time of writing, the DAX was up by 43 points, with the Dow up by 7 points.

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