European Equities: A Quiet Economic Calendar Leaves COVID-19 and Central Banks in Focus

The Majors

It was a particularly bearish day for the European majors on Thursday.

The CAC40 slid by 2.01%, with the DAX30 and the EuroStoxx600 ending the day with losses of 1.73% and 1.72% respectively.

Yet more disappointing economic data from Germany and a rise in jobless claims from the U.S added to the market angst.

A dovish set of ECB minutes and a shift in the ECB’s inflation target to 2% failed to support the majors.

The continued spread of the Delta variant will have added to concerns over the sustainability of the current economic recovery.

While recent manufacturing PMI numbers from the Eurozone and member states have impressed, non-survey-based data have been less impressive.

The Stats

It was another relatively quiet start to the European session. German trade data was in focus.

Trade Data

In May, Germany’s trade surplus narrowed from €15.2bn to €12.3bn. Economists had forecast a widening to €17.4bn.

According to Destatis,

• Exports increased by 0.3% on the previous month and by 36.4% on the same month a year earlier.
• Imports increased by 3.4% on the previous month and by 32.6% on the same month a year earlier.

Trade with EU countries,

• Germany exported goods to the value of €60.7bn to EU member states, while importing goods to the value of €52.9bn.
• Compared with May 2020, exports were up 43.3% and imports up 38.1%.
• Goods exported to euro area countries increased by 40.2%, with imports up 36.9%.
• In May 2021, goods exported to EU countries outside of the euro area rose by 50.8%, with imports up 40.8%, year-on-year.

Trade with non-EU countries,

• Exports to non-EU countries increased by 28.7%, with imports rising by 26.5%.
• Compared with May 2020, exports to the UK jumped by 46.3%, while imports from the UK rose by 26.2%.
• Exports to China rose by 17.1%, while exports to the U.S surged by 40.7%.

From the U.S

It was also another quieter day on the U.S economic calendar. On the economic data front, the weekly jobless claim figures were in focus. In the week ending 2^nd July, jobless claims rose from 371k to 373k. Economists had forecast claims to fall to 320k,

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. Volkswagen slid by 3.02%, with Continental and Daimler ending the day down by 2.79% and by 2.42% respectively. BMW also struggled, falling by 2.18%.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank saw losses of 3.39% and 1.76% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas and Soc Gen slid by 2.86% and by 3.12% respectively, with Credit Agricole falling by 1.61%.

It was also a bearish day for the French auto sector. Stellantis NV and Renault ended the day down by 3.35% and 1.59% respectively.

Air France-KLM bucked the trend, rising by 0.29%, while Airbus SE fell by a relatively modest 0.73%.

On the VIX Index

It was back into the green for the VIX on Thursday, marking just the 2^nd day in the green from 6-sessions.

Reversing a 1.46% decline from Wednesday, the VIX jumped by 17.28% to end the day at 19.00.

The NASDAQ fell by 0.72%, with the Dow and the S&P500 ending the day down 0.75% and by 0.86% respectively.

The Day Ahead

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

From the U.S, there are also no material stats to consider later in the day.

The lack of stats will leave the markets to consider the latest set of minutes from the ECB and FED and updates on the Delta variant of the coronavirus.

On the monetary policy front, ECB President Lagarde is scheduled to speak later in the day. Following the latest sell-off, any chatter on the economic outlook would likely influence.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 4 points.

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