European Equities: A Light Economic Calendar to Test Support ahead of the U.S Open

The Majors

It was a mixed day for the European majors on Thursday.

The DAX30 and the CAC40 saw modest gains of 0.08% and 0.24% respectively, while the EuroStoxx600 slipped by 0.04%.

Economic data had a limited impact on the majors, in spite of positive numbers from Germany and the U.S.

The ECB’s monetary policy decision and press conference delivered much-needed support to the majors, however.

Through the early part of the sessions, concerns over a more hawkish shift on monetary policy had weighed on the majors.

Plans to modestly cut the pandemic’s emergency bond purchasing program was good enough to leave the majors relatively flat.

The Stats

German trade data was in focus going into the European open.

In July, Germany’s trade surplus widened from €13.6bn to €17.9bn. Economists had forecast a narrowing to €13.0bn

According to Destatis,

• Exports were up 0.5% on the previous month and up by 12.4% on the same month a year earlier.
• Imports were down 3.8% on the previous month, while up 16.6% on the same month a year earlier.

Trade with EU Countries:

• Goods exports to EU member states rose by 17.7%, year-on-year, with imports up 18.7%.
• To euro area countries, exports rose by 17.4%, with imports from euro area countries up 22.4%.
• Exports to EU countries not belonging to the euro area increased by 18.4%, while imports were up by 11.0%.

Trade with non-EU Countries:

• Exports to third countries increased by 6.8%, with imports from third countries up 14.2%.

Trade with the UK:

• Compared with the same month last year, exports were up 7.2% to the UK. Imports from the UK increased by 15.6%.

Elsewhere:

Exports to China fell by 4.3%, year-on-year, while exports to the U.S were up 15.7%.

From the U.S

Jobless claim figures were in focus, though the stats had a muted impact, with the release coinciding with the ECB press conference.

In the week ending 3^rd September, initial jobless claims fell from 345k to a post-pandemic low 310k. Economists had forecast a decline to 335k.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Volkswagen and BMW ended the day up by 0.84% and by 0.03% respectively. Daimler and Continental fell by 0.15% and by 0.55% respectively, however.

It was also a mixed day for the banks. Deutsche Bank rose by 0.14%, while Commerzbank slid by 2.10%.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.45% and by 0.17% respectively, with Soc Gen ending the day up by 0.57%.

It was a mixed day for the French auto sector, however. Stellantis NV rose by 0.40%, while Renault fell by 0.47%.

Air France-KLM joined airline stocks in the red, falling by 0.97%, while Airbus SE rose by 1.30%.

On the VIX Index

It was back into the green the VIX on Thursday.

Reversing a 0.99% fall from Wednesday, the VIX rose by 4.68% to end the day at 18.80.

On Thursday, the NASDAQ fell by 0.25%, with the Dow and S&P500 ending the day down by 0.43% and by 0.46% respectively.

The Day Ahead

It’s a quieter day ahead on the Eurozone’s economic calendar.

Finalized August inflation figures for Germany are due out going into the European open.

Barring a marked revision from prelim figures, however, the numbers should have a muted impact on the majors. On Thursday, the ECB stood by its transitory view on inflation. That should limit the impact of any marginal upward revision.

From the U.S, wholesale inflation figures will likely have a greater impact, however. A spike in wholesale inflation could give the FOMC hawks firmer footing for a near-term shift in policy, albeit a tapering to the asset purchasing program.

Following a pullback in the U.S markets on Thursday, concerns over the economic outlook will likely remain a factor with little on the economic calendar for the markets to consider.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 9 points.

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