European Equities: Another Quiet Economic Calendar Leaves U.S Economic Data in Focus
Friday, 14th May 2021
Spanish CPI (YoY) (Apr) Final
Spanish HICP (YoY) (Apr) Final
It was a partial recovery of Tuesday’s sell-off for the European majors on Wednesday.
The EuroStoxx600 rose by 0.36%, with the CAC40 and the DAX30 ending the day up by 0.19% and by 0.20% respectively.
Upbeat market sentiment towards the economic outlook provided a cushion for the broader European markets mid-week.
With stats on the lighter side, better than corporate earnings and GDP numbers from the UK fueled market optimism.
The upside came in spite of a sharp acceleration in U.S inflation that weighed on the U.S majors on Wednesday.
In the month of April, consumer price increased by x%, following a 0.7% rise in March. This was in line with prelim figures.
At the turn of the quarter, the annual rate of inflation picked up from 1.7% to 2.0% according to finalized figures. This was in line with prelim figures.
According to Destatis,
- Compared with a year earlier, energy prices jumped by 7.9%, following a 4.8% rise in March 2021.
- Food prices increased by 1.9%.
- Prices for mobile phones slid by 8.3%, however.
- Excluding energy product prices, the rate of inflation would have been 1.4% in April.
- Prices for services were up 1.6% in April 2021 compared with the same month in 2020. Net rents exclusive of heating expenses rose by 1.3%.
In the month of April, consumer prices increased by 0.1%, which was down from a prelim 0.2%. Consumer prices had risen by 0.6% in the month of March.
According to Insee.Fr,
- Prices for manufactured goods fell by 0.1% after a 1.6% increase in March.
- Energy prices fell by 0.4% after a 2.2% jump in March.
- While tobacco prices were stable, food prices increased by 0.6% in the month.
- Prices for services grew by 0.1%.
- The annual rate of inflation ticked up from 1.1% to 1.2% in April.
- Energy prices jumped by 8.8% after being up by 4.7% in March, with prices for services up 1.2%.
- Prices for manufactured goods held steady, while food prices fell by 0.3%.
Eurozone Industrial Production
In March, industrial production rose by 0.1%, month-on-month, following a 1.2% decline from April. Economists had forecast a 0.7% increase.
When compared with March 2020, industrial production was up by 10.9%, falling short of a forecasted 11.6 increase. In February, production had fallen by 1.8% year-on-year.
According to Eurostat,
- Compared with Feb-2021, production of non-durable consumer goods rose by 1.9%, and energy by 1.2%.
- The production of intermediate goods rose by 0.6%, while the production of capital goods fell by 1.0%.
- For durable consumer goods, production fell by 1.2% in the month.
- When compared with Mar-2020, production of durable consumer goods jumped by 34.4%.
- There were also marked increases in the production of capital goods (+16.1%) and intermediate goods (+13.3%).
- Energy production rose by 3.3%, while the production of non-durable goods increased by just 0.7%.
By member state, industrial production in Italy rose by 37.7%, year-on-year, to lead the way.
From the U.S
Inflation figures were in focus late in the session.
In April, core consumer prices jumped by 0.9%, following a 0.3% increase in March. More significantly, the core annual rate of inflation accelerated from 1.6% to 3.0%. Economists had forecast a core annual rate of inflation of 2.3%.
Month-on-month, consumer prices rose by 0.8%, following a 0.6% increase in March. Economists had forecast for consumer prices to increase by 0.2%.
The Market Movers
For the DAX: It was a bearish day for the auto sector on Wednesday. Volkswagen slid by 2.65%, with Continental declining by 1.43%. BMW and Daimler saw modest losses of 0.40% and by 0.15% respectively.
It was a bullish day for the banks, however. Deutsche Bank rose by 0.92%, while Commerzbank jumped by 8.56% off the back of better-than-expected earnings.
From the CAC, it was a bullish day for the banks. Soc Gen rallied by 2.08%, with BNP Paribas and Credit Agricole ending the day up by 1.43% and by 1.53% respectively.
It was another bearish day for the French auto sector, however. Stellantis NV fell by 0.53%, with Renault following Tuesday’s 6.44% slide with a 1.25% loss.
Air France-KLM and Airbus SE ended the day with modest gains of 0.49% and 0.69% respectively.
On the VIX Index
It was a third consecutive day in the green for the VIX on Wednesday.
Following on from an 11.09% rise on Tuesday, the VIX jumped by 26.33% to end the day at 27.59.
The NASDAQ slid by 2.67%, with the Dow and the S&P500 ending the day down by 1.99% and by 2.14% respectively.
The Day Ahead
It’s a particularly quiet day ahead on the European economic calendar. There are no material stats for the markets to consider.
From the U.S, wholesale inflation and jobless claim figures will influence later in the day.
With the European majors having managed to avoid a pullback in response to U.S inflation figures on Wednesday, the fall across the U.S markets on Wednesday will likely influence early on.
In the futures markets, at the time of writing, the Dow Mini up by 98 points, while the DAX was down by 53 points.
For a look at all of today’s economic events, check out our economic calendar.