European Equities: Earnings, Economic Data, and the U.S Stimulus Package in FocusIt’s a busy day ahead. While the majors will respond to the FED’s commitment, stats, earnings and the progress of the U.S stimulus package will influence.
Thursday, 30th July
German GDP (QoQ) (Q2)
German GDP (YoY) (Q2)
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German Unemployment Change (Jul)
German Unemployment Rate (Jul)
Eurozone Unemployment Rate (Jun)
German CPI (MoM) (Jul) Prelim
Friday, 31st July
French GDP (QoQ) (Q2)
German Retail Sales (MoM) (Jun)
French Consumer Spending (MoM) (Jun)
French CPI m/m (Jul) Prelim
French HICP m/m (Jul) Prelim
Spanish GDP (QoQ) (Q2)
Italian CPI (MoM) (Jul) Prelim
Eurozone CPI (YoY) (Jul) Prelim
Eurozone Core CPI y/y (Jul) Prelim
Eurozone GDP q/q (Q2) 1st Estimate
Eurozone GDP y/y (Q2) 1st Estimate
It was a mixed day for the European majors on Wednesday. The CAC30 rose by 0.60%, while the DAX30 and EuroStoxx600 ended the day with losses of 0.10% and 0.06% respectively.
The majors were largely in a holding pattern ahead of the FED’s monetary policy decision and the all-important press conference. Hopes of the FED assuring unwavering support propped up the European majors mid-week.
Earnings were also in focus on the day, however. While the CAC40 found support, the DAX30 struggled off the back of sentiment towards the latest batch of results.
It was another particularly quiet day on the Eurozone economic calendar. There were no material stats to provide the European majors with direction.
From the U.S
Late in the European session, June trade data and pending home sales had a muted impact on the European majors.
The markets were holding out for the FED and the FOMC press conference scheduled for after the European close.
The Market Movers
For the DAX: It was a mixed day for the auto sector on Wednesday. BMW and Volkswagen fell by 2.17% and by 1.38% respectively to lead the way. Continental fell by a more modest 0.82%, while Daimler bucked the trend, rising by 0.90%.
It was a bearish day for the banks. Deutsche Bank and Commerzbank ended the day down by 3.11% and by 1.44% respectively. For Deutsche Bank, while the bank beat earnings forecasts, concerns over what lies ahead weighed, as provisions for bad loans were ramped up.
From the CAC, it was a bearish day for the banks. Soc Gen slid by 2.67%, with BNP Paribas and Credit Agricole falling by 1.02% and by 1.10% respectively.
It was also a bearish day for the French auto sector. Peugeot and Renault slid by 3.05% and by 3.31% respectively.
Air France-KLM and Airbus SE also struggled, with the pair ending the day with losses of 0.29% and 2.62% respectively.
On the VIX Index
It was a 3rd day in the red from 4 for the VIX on Wednesday. Reversing a 2.83% gain from Tuesday, the VIX fell by 5.27% to end the day at 24.10.
Late in the U.S session, the FED Chair Powell’s promise of continued support and no intention to move rates northwards delivered support.
Hopes were for a dovish FED and, with the continued rise in new COVID-19 cases, the markets got the FED’s commitment.
The S&P500 and NASDAQ rose by 1.24% and by 1.35% respectively, with the Dow gaining a more modest 0.61%.
The Day Ahead
It’s a busy day ahead on the Eurozone economic calendar. Key stats include 2nd quarter GDP and July unemployment numbers for Germany.
German inflation prelim inflation figures for July and Eurozone unemployment numbers are also due out.
We expect Germany’s GDP and unemployment figures to have the greatest impact on the day.
On the earnings front, Total, Airbus Grp, and Renault are also in focus on the day.
From the U.S
2nd quarter GDP numbers and the weekly jobless claims figures are due out. While we can expect the GDP numbers to influence, disappointing claims figures would weigh heavily on risk appetite.
Outside of the numbers, expect COVID-19 numbers, geopolitics, and updates on the U.S stimulus package to also influence.
Going into the European open, the FED’s assurances of unwavering commitment should deliver some early support, however.
The Latest Coronavirus Figures
According to figures at the time of writing, the number of new coronavirus cases rose by 263,777 to 17,147,431 on Wednesday. On Tuesday, the number of new cases had risen by 241,391. The daily increase was higher than Tuesday’s rise while down from 288,688 new cases from the previous Wednesday.
Germany, Italy, and Spain reported 3,179 new cases on Wednesday, which was up from 2,602 new cases on Tuesday. On the previous Wednesday, 2,217 new cases had been reported.
From the U.S, the total number of cases rose by 56,571 to 4,554,780 on Wednesday. On Tuesday, the total number of cases had increased by 64,799. On Wednesday, 22nd July, a total of 72,306 new cases had been reported.
In the futures markets, at the time of writing, the Dow was up by 13 points.
For a look at all of today’s economic events, check out our economic calendar.