European Equities: A Quiet Start to the Week Leaves Data from China to Set the Tone

Following the disappointing U.S inflation figures from Wednesday, Friday’s stats further suggested the need for the FED to stand pat.

Stats from the Eurozone provided support, with Eurozone trade data pointing to improving trade terms.

COVID-19 remained a major concern, however. A continued rise in new cases globally has raised uncertainty over the economic outlook.

The Stats

Economic data was on the busier side this morning, with French inflation and Eurozone trade data in focus.

In June, the Eurozone’s trade surplus widened from €7.5bn to €18.1bn. Economists had forecast a widening to €18.2bn.

According to Eurostat,

• Euro area goods exports to the rest of the world rose by 23.8% to €209.9bn compared with June 2020.
• Imports from the rest of the world increased by 28.2% to €191.8bn.
• In January to June 2021, intra-euro area trade rose by 20.3% when compared with January to June 2020.
• Euro area goods exports increased by 15.5% in January-June 2021, when compared with January-June 2020. Imports rose by 15.2%.

Inflation figures from France had a muted impact on the majors, however. In July, France’s annual rate of inflation softened from 1.5% to 1.2%, which was in line with prelim figures.

From the U.S

Consumer sentiment figures for August were out late in the European session.

According to prelim figures, the Michigan Consumer Sentiment Index slid from 81.2 to 702. Economists had forecast an increase to 81.5. The Michigan Consumer Expectations Index also took a hit, falling from 79.0 to 65.2.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. Continental bucked the trend, rising by 1.11%. BMW and Daimler fell by 0.32% and by 0.26% respectively, with Volkswagen down by 0.51%.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank ended the day with gains of 0.50% and 0.04% respectively.

From the CAC, it was a mixed day for the banks. Soc Gen slipped by 0.04%, while BNP Paribas and Credit Agricole ended the day up by 0.11% and 0.42% respectively.

It another mixed day for the French auto sector. Stellantis NV rose by 0.61%, while Renault fell by 0.61%.

Air France-KLM also saw red, falling by 0.54%, while Airbus SE ended the day up by 0.12%.

On the VIX Index

It was a 3^rd consecutive day in the red for the VIX on Friday.

Following a 2.93% decline on Thursday, the VIX fell by 0.90% to end the day at 15.45.

The Dow and the NASDAQ both rose by 0.04%, with the S&P500 ending the day up by 0.16%.

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone’s economic calendar. There are no material stats to provide the majors with direction at the start of the week.

From the U.S, NY Empire State Manufacturing data will draw some interest late in the session.

Ahead of the European open, however, economic data from China will set the tone.

Industrial production, fixed asset investment, retail sales, and unemployment figures are due out this morning.

Away from the economic calendar, news from Capitol Hill, COVID-19 updates, and FOMC member chatter will also need monitoring.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 45 points.

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