European Equities: COVID-19 News, Economic Data and the ECB in Focus
Thursday, 16th July
French CPI (MoM) (Jun) Final
French HICP (MoM) (Jun) Final
Eurozone Trade Balance (May)
Deposit Facility Rate (Jul)
ECB Interest Rate Decision (Jul)
ECB Press Conference
Friday, 17th July
Eurozone Core CPI (YoY) (Jun) Final
Eurozone CPI (MoM) (Jun) Final
Eurozone CPI (YoY) (Jun) Final
It was back into the green for the European majors on Wednesday, which managed to reverse Tuesday’s pullback.
The CAC40 rallied by 2.03%, with the DAX30 and EuroStoxx600 gaining 1.84% and 1.76% respectively.
Following the market jitters over moves across California to contain a new spread of the virus, it was vaccine hopes that delivered the upside.
The race to find an effective vaccine is on, with a number of contenders delivering positive news to the markets this week. An introduction of an effective vaccine and treatment would support a more rapid global economic recovery.
It was a quiet day on the Eurozone economic calendar. Key stats included finalized inflation figures out of Italy that had a muted impact on the majors.
In June, consumer prices rose by 0.1%, partially reversing a 0.2% decline from May. Economists had forecast a 0.1% rise.
From the U.S
It was a busier day on the U.S calendar. The NY Empire State Manufacturing Index jumped from -0.20 to 17.20, with industrial production rising by 5.4% following a 1.4% increase in May.
Both sets of numbers supported the optimism over a speedier economic recovery amidst the COVID-19 spikes across parts of the U.S.
The Market Movers
For the DAX: It was a mixed day for the auto sector on Wednesday. Daimler and Volkswagen led the way, with gains of 1.20% and by 2.53% respectively. BMW rose by a more modest 0.19%, while Continental fell by 0.65%.
It was another bullish day for the banks. Deutsche Bank rose by 1.74%, with Commerzbank ending the day up by 1.49%.
From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen rallied by 2.73% and by 2.74% respectively to lead the way. Credit Agricole saw a more modest gain of 1.33%.
The French auto sector also found support, with Peugeot and Renault rising by 1.46% and by 3.76% respectively.
Air France-KLM jumped by 6.7%, A COVID-19 vaccine would material shift the outlook for the sector. Airbus SE wasn’t far behind, rallying by 4.63%.
On the VIX Index
It was a 2nd consecutive day in the red for the VIX on Wednesday. Following on from an 8.29% slide on Tuesday, the VIX fell by 5.96% to end the day at 27.76.
News of solid progress towards an effective COVID-19 vaccine and better than expected earnings delivered the upside.
The S&P500 rose by 0.91%, with the Dow and NASDAQ seeing gains of 0.85% and 0.59% respectively.
The Day Ahead
It’s another relatively quiet day ahead on the Eurozone economic calendar. Key stats are limited to finalized June inflation figures from France and trade data from the Eurozone.
The numbers are unlikely to have too much impact, with the ECB in action later this afternoon.
Expect the ECB press conference to be the main event of the day, with the markets still in need of assurances from central banks.
From the U.S
It’s a busy day on the economic calendar. Philly FED Manufacturing and U.S retail sales figures are due out along with the U.S weekly jobless claims.
We can expect the stats to influence, with retail sales and the jobless claims needing to impress.
Ultimately, however, any further chatter on progress towards a COVID-19 vaccine could be enough for the bulls.
From earlier in the day, 2nd quarter GDP numbers from China will likely set the tone going into the European session.
The Latest Coronavirus Figures
On Wednesday, the number of new coronavirus cases rose by 215,144 to 13,669,634 based on figures at the time of writing. On Tuesday, the number of new cases had risen by 218,739. The daily increase was lower than Tuesday’s rise and 222,368 new cases from the previous Wednesday.
Germany, Italy, and Spain reported 1,523 new cases on Wednesday, which was up from 1,110 new cases on Tuesday. On the previous Wednesday, 986 new cases had been reported.
From the U.S, the total number of cases rose by 66,528 to 3,611,605 on Wednesday. On Tuesday, the total number of cases had increased by 65,594. On Wednesday, 8th July, a total of 62,416 new cases had been reported.
In the futures markets, at the time of writing, the Dow up by a modest 18 points.
For a look at all of today’s economic events, check out our economic calendar.