European Equities: A Quiet Economic Calendar Leaves Central Bank Chatter in Focus
Monday, 21st June
ECB President Lagarde Speaks
Tuesday, 22nd June
Eurozone Consumer Confidence (Flash)
Wednesday, 23rd June
French Manufacturing PMI (Jun) Prelim
French Services PMI (Jun) Prelim
German Manufacturing PMI (Jun) Prelim
German Services PMI (Jun) Prelim
Eurozone Manufacturing PMI (Jun) Prelim
Eurozone Markit Composite PMI (Jun) Prelim
Eurozone Services PMI (Jun) Prelim
Thursday, 24th June
Spanish GDP (QoQ) (Q1)
German Ifo Business Climate Index (Jun)
ECB Economic Bulletin
Friday, 25th June
GfK German Consumer Climate (Jul)
It was particularly bearish end to the week for the European majors on Friday.
The DAX30 slid by 1.78%, with the CAC40 and the EuroStoxx600 falling by 1.46% and by 1.58% respectively.
Market reaction to the more hawkish than expected FOMC interest rate projections continued to weigh on the majors.
A sharp pickup in German wholesale inflationary pressures added to the negative mood at the end of the week.
With no major stats from the U.S to consider, hawkish FOMC member chatter and talk of a rate cut as early as late 2022 also weighed.
It was a quiet day on the economic calendar, with stats limited to wholesale inflation figures from Germany.
In May, Germany’s annual wholesale rate of inflation accelerated from 5.2% to 7.2%, coming in ahead of a forecasted 6.4%. Month-on-month, the producer price index jumped by 1.5%, following a 0.8% rise in April. Economists had forecast a more modest 0.7% increase.
From the U.S
There were no material stats from the U.S to provide the majors with direction.
The Market Movers
For the DAX: It was a bearish day for the auto sector on Friday. Daimler and Volkswagen slid by 2.66% and by 2.62% respectively, with BMW ending the day down by 2.40%. Continental fell by a more modest 1.22% on the day.
It was also a bearish day for the banks. Deutsche Bank and Commerzbank slid by 2.80% and by 2.86% respectively.
From the CAC, it was a particularly bearish day for the banks. BNP Paribas and Credit Agricole slid by 4.56% and by 4.08% respectively. Soc Gen fell by 3.40%.
It was a bearish day for the French auto sector. Stellantis NV and Renault ended the day with losses of 2.91% and 3.99% respectively.
Air France-KLM slipped by 0.96%, with Airbus SE falling by 1.64%.
On the VIX Index
It was a back into the green for the VIX on Friday, marking a 4th day in the green for the week.
Reversing a 2.20% fall from Thursday, the VIX jumped by 16.62% to end the day at 20.70.
The NASDAQ fell by 0.92%, with the Dow and the S&P500 ending the day down by 1.58% and by 1.31% respectively.
The Day Ahead
It’s a particularly quiet day ahead on the European economic data front.
There are no major stats due out of the Eurozone to provide the majors with direction. From the U.S, there are also no major stats, leaving the majors to take their cues from the U.S markets late in the day.
On the monetary policy front, ECB President Lagarde is scheduled to speak later in the day. Further assurances from the ECB president of unwavering support would provide the markets with comfort.
From the U.S, the markets will need to monitor any FOMC member chatter on the day.
Ahead of the European open, the PBoC is also in action. Any increases to the loan prime rates could spook the markets.
In the futures markets, at the time of writing, the Dow Mini was up by 5 points.
For a look at all of today’s economic events, check out our economic calendar.