European Equities: A Quiet Economic Calendar Leaves Stimulus and COVID-19 News in FocusThe battle between COVID-19 and fiscal stimulus will resume today, with few stats in focus to give the market direction.
It was back into the red for the European majors, bringing to an end a run of 2 consecutive days in the green.
The CAC40 fell by 0.81% to lead the way down. It wasn’t much better for the DAX30 and EuroStoxx600 that ended the day with losses of 0.75% and 0.71% respectively.
In the early part of the European session, the majors had found support following positive COVID-19 news from China.
China’s Centre for Disease Control and Prevention stated that the outbreak in Beijing was now under control. In spite of the positive news, the upward trend in new coronavirus cases remained a concern on the day.
Later in the session, disappointment over the BoE’s QE increase and a rise in U.S weekly jobless claims sent the majors back into the red.
It was a quiet day on the Eurozone economic calendar on Thursday. There were no material stats to provide the majors with direction.
That left the majors in the hands of COVID-19 news, the ECB’s Economic Bulletin, and the U.S weekly jobless claims.
From the ECB, however, the Economic Bulletin provided nothing new for the markets to consider on the day.
Following a string of comments from ECB President Lagarde and other central bankers, the doom and gloom had been well broadcasted.
From the U.S
The weekly jobless claims data was a disappointment, weighing on the majors later in the European session. In the week ending 12th June, the initial jobless claims increased by 1.508m, following an upwardly revised 1.566m in the week prior. Economists had forecast 1.3m increase.
For the U.S, employment figures, consumer confidence, and service sector activity are key indicators as states reopen.
A bounce back in the Philly FED Manufacturing Index in June, therefore, did little to ease the pain…
The Market Movers
For the DAX: It was yet another mixed day for the auto sector on Thursday. Continental and Volkswagen fell by 0.21% and by 0.79% respectively. BMW and Daimler saw modest gains of 0.11% and 0.10% respectively.
It was also another bearish day for the banks. Deutsche Bank and Commerzbank saw losses of 0.89% and 6.83% respectively.
Deutsche Lufthansa saw red for a 2nd consecutive day, falling by 2.60% off the back of a 2.58% decline on Wednesday.
The story of the day, however, was WIRECARD AG, which slumped by 65.46% on news that €1.9bn of cash is missing. As a result, it delayed it’s releasing its annual results again. WIRECARD facing the prospects of €2bn in loans being terminated if 2019 financials are not provided by today…
From the CAC, it was a mixed day for the banks. Soc Gen rose by 0.46% to buck the trend on the day. BNP Paribas and Credit Agricole saw relatively modest losses of 0.10% and 0.12% respectively.
The French auto sector also struggled. Peugeot rose by 0.22%, while Renault fell by 0.57% on the day.
Air France-KLM and Airbus SE saw heavier losses of 1.75% and 1.98% respectively.
On the VIX Index
It was a 5th consecutive day in the red for the VIX on Thursday, which fell by 1.58%. Following on from a 0.59% decline from Wednesday, the VIX ended the day at 32.94.
Another mixed day for the U.S equity markets saw the S&P500 and NASDAQ close out the day in the green, while the Dow slipped by 0.15%.
Jitters over a 2nd wave pandemic lingered in spite of news from China that the spike in new cases in Beijing was contained.
A disappointing set of weekly jobless claims figures also pinned back the majors on the day.
The Day Ahead
It’s a quiet day ahead on the Eurozone economic calendar. German wholesale inflation figures for May are due out going into the European open.
We don’t expect any influence from the numbers, however, with COVID-19 and geopolitics front and center.
From the U.S, economic data includes current account figures that will also have a muted impact on risk sentiment.
We could see the U.S government move towards rolling out the next round of fiscal stimulus to give the markets a boost. If it doesn’t materialize, the talk of an imminent announcement may be enough…
It could be another mixed day, however, if there’s an uptick in new COVID-19 cases and there’s silence on Capitol Hill.
The Latest Coronavirus Figures
On Thursday, the number of new coronavirus cases rose by 169,995 to 8,551,856. On Wednesday, the number of new cases had risen by 125,202. The daily increase was higher than Wednesday’s rise and 136,875 new cases from the previous Thursday.
Germany, Italy, and Spain reported 787 new cases on Thursday, which was down from 2,480 new cases on Wednesday. On the previous Thursday, 1,091 new cases had been reported.
From the U.S, the total number of cases rose by 25,576 to 2,257,604 on Thursday. On Wednesday, the total number of cases had risen by 23,628. On Thursday, 11th June, the U.S had reported a total of 23,403 new cases.
In the futures markets, at the time of writing, the Dow was up by 56 points.
For a look at all of today’s economic events, check out our economic calendar.