European Equities: Day 2 of Testimony, the ECB and Inflation to Influence…

It could be a choppy day ahead. With inflation and the ECB minutes in focus, sentiment towards monetary policy could turn once more…
Bob Mason
List of stock market indices

Economic Calendar:

Thursday, 11th July

  • German CPI (MoM) (Jun) Final
  • French CPI (MoM) (Jun) Final
  • French HICP (MoM) (Jun) Final
  • ECB Monetary Policy Meeting Minutes

Friday, 12th July

  • Spanish CPI (YoY) (Jun) Final
  • Spanish HICP (YoY) (Jun) Final
  • Eurozone Industrial Production (MoM) (May)

The Majors

The majors saw red for a 4th consecutive day on Wednesday. Leading the way down once more was the DAX30, which fell by 0.51%. The EuroStoxx600 fell by 0.2%, with the CAC40 falling by 0.08% on the day.

It was a different story in the U.S, where the S&P500 and NASDAQ rose by 0.45% and by 0.75% respectively. The Dow saw a more modest 0.29% gain on the day.

Driving the majors on the day was sentiment towards monetary policy, with FED Chair Powell’s testimony to Congress and the FOMC meeting minutes in focus.

The Stats

There were no material stats out of the Eurozone on Wednesday to provide the majors with direction. The lack of stats left the majors sensitive to moves through the Asian session and the U.S economic calendar.

On the U.S economic calendar, it was all eyes on FED Chair Powell’s testimony to Congress. FED Chair Powell reassured the markets that the FED would deliver should the need arise, but held back from fully committing to a rate cut. While sitting on the fence to a certain degree, the tone was on the dovish side.

It wasn’t enough to give the European majors a boost, however.

On the geopolitical front, U.S – China trade talks began on Tuesday, with the U.S administration stating that talks were constructive. The update may well have been an indicator of just how long negotiations could drag out for…

The Market Movers

From the DAX, Deutsche Bank was amongst the top performers on the day, rising by 0.81%. Commerzbank found strong support, rallying by 2.51% as the banking sector bounced back. It was doom and gloom for the auto sector, however. Continental was the worst performer on the day, sliding by 1.82%. Daimler (-1.34%), Volkswagen (-1.05%) and BMW (-0.97%) weren’t far behind…

From the CAC, BNP Paribas ended the day with a 0.28% gain, with Credit Agricole up by 0.32%. Soc Gen led the way, rallying by 1.01%. Renault joined its German peers in the red, falling by 0.94% on the day.

The Day Ahead

It’s a busy day ahead, with finalized June inflation figures due out of France and Germany. Outside of the numbers, the ECB monetary policy meeting minutes are also due out and will influence the majors.

While Draghi had held back from talking about further policy easing at the last press conference, the minutes could provide more color on what lies ahead.

From the U.S session, June inflation figures and FED Chair Powell’s 2nd day of testimony to Congress will also be of influence.

While Powell is unlikely to deliver a different outlook from Wednesday’s testimony, there may be more details to consider.

At the time of writing, the DAX was up by 30.5 points, while the Dow Mini was up by 30 points.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.