European Equities: ECB Press Conference and U.S Stats to Provide Direction

Hopes of a continued hold on policy by the ECB delivered further support, though uncertainty over inflation limited the upside.

The Stats

It was a quieter day on the economic data front. German trade data for April was in focus going into the European open.

In April, Germany’s trade surplus widened from €14.3bn to €15.9bn. Economists had forecast a widening to €16.3bn.

According to Destatis,

• Exports increased 0.3%, month-on-month, following a 1.2% rise in March.
• Year-on-year, exports were up 47.7%.
• Import slipped by 1.7%, month-on-month, partially reversing a 6.5% increase in March.
• Year-on-year, imports were up by 33.2%.

The details:

• Compared with April 2020, goods exports to EU countries rose by 58.6%, with imports up by 44.8%.
• Goods exports to the Eurozone increased by 59.8%, with imports rising by 40.5%.
• To EU countries outside of the Eurozone, goods exports increased by 55.9%, with imports up 55.1%.
• To non-EU countries, exports rose by 36.5%, with imports up by 22.3%.
• Exports to the UK surged by 64.1%, while imports from the UK slipped by 0.6%.
• To China, exports rose by 16.0%, year-on-year, while exports to the U.S increased by 59.9%.

From the U.S

There were no major stats to provide the European majors with direction later in the session.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. Daimler and Continental fell by 1.42% and by 1.25% respectively, with BMW and Volkswagen ending the day down by 1.00% and by 0.96% respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank ended the day with losses of 2.12% and 1.49% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas and Soc Gen fell by 0.79% and by 0.51% respectively, with Credit Agricole declining by 1.29%.

It was a mixed day for the French auto sector, however. Stellantis NV fell by 1.59%, while Renault rose by 0.41%.

Air France-KLM rallied by 3.27%, with Airbus SE eking out a 0.09% gain.

On the VIX Index

It was a 2^nd consecutive day in the green for the VIX on Wednesday.

Following a 3.96% gain from Tuesday, the VIX rose by 4.80% to end the day at 17.89.

The Dow fell by 0.44%, with the NASDAQ and the S&P500 ending the day down by 0.09% and by 0.18% respectively.

The Day Ahead

It’s a quieter day ahead on the European economic calendar.

French nonfarm payroll figures for the 1^st quarter are due out ahead of the European open.

We don’t expect the numbers to influence, however, with the ECB delivering its June monetary policy decision later in the day.

With the markets expecting the ECB to stand pat on policy, expect the ECB President Lagarde press conference to be the key driver.

The focus will be on any tapering talk and the ECB’s outlook on inflation and the economic recovery.

From the U.S, inflation and jobless claims figures will also influence though any impact may be delayed as the stats coincide with the timing of the ECB press conference.

A marked fall in jobless claims and a sharp pickup in inflationary pressures would reignite fears of a near-term move by the FED…

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 41 points.

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