European Equities: Economic Data and Trade War Chatter in FocusThe futures market is pointing to a mixed start to the day. Negative sentiment towards the ongoing trade war continues to limit the upside for the majors.
Tuesday, 18th June
- German ZEW Current Conditions (Jun)
- German ZEW Economic Sentiment (Jun)
- Eurozone ZEW Economic Sentiment (Jun)
- Eurozone Core CPI (YoY) (May) Final
- Eurozone CPI (YoY) (May) Final
- Eurozone CPI (MoM) (May)
- Eurozone Trade Balance (Apr)
Wednesday, 19th June
- German PPI (MoM) (May)
Thursday, 20th June
- ECB Economic Bulletin
- Eurozone Consumer Confidence Flash
Friday, 21st June
- French Manufacturing PMI (Jun) Prelim
- French Services PMI (Jun) Prelim
- German Manufacturing PMI (Jun) Prelim
- German Services PMI (Jun) Prelim
- Eurozone Manufacturing PMI (Jun) Prelim
- Eurozone Markit Composite PMI (Jun) Prelim
- Eurozone Services PMI (Jun) Prelim
It was a mixed day for the European majors on Monday. The DAX30 and EuroStoxx600 both fell by 0.09%, while the CAC40 managed a 0.43% gain on the day.
Trade war chatter on the day continued to pressure the majors. Chatter from the U.S administration continued to suggest possible tariffs on auto imports. Trump is also reportedly more than happy to impose fresh tariffs on an additional $300bn worth of Chinese goods should progress not be made at the G20 Summit next week.
Economic data on Monday was limited to Eurozone 1st quarter wage growth figures. According to figures released by Eurostat, the only member state to report a fall in wages was Greece. Wages fell by 0.2%. Eurozone wages grew by 2.5% in the quarter, falling short of a forecasted 2.6% rise. Wages grew by 2.3% in the 4th quarter of last year.
The stats had a muted impact on the majors, with the markets focused on the week ahead.
From the U.S, the NY Empire State Manufacturing Index fell from +17.80 to -8.60 in June. It was the largest monthly decline on record.
While the numbers didn’t send the European majors into a spin, they will certainly place further uncertainty over how the FED will project growth through the remainder of the year and how dovish FED members will be.
The Market Movers
From the DAX, Lufthansa sunk by 11.79% following a profit warning, pulling the DAX30 into the red on the day.
From the auto sector, Continental also saw heavy losses, falling by 2.14%. BMW (-0.4%), Daimler (-0.07%), and Volkswagen (-0.13%) all following Continental into the red. It’s a tough time for the sector, with the threat of tariffs and concerns over the global economic outlook limiting any upside.
It was a mixed session for the banks, with Deutsche Bank rising by 0.36%, whilst Commerzbank fell by 0.26%.
From the CAC40, the banking sector was also mixed. BNP Paribas fell by 0.26%, whilst Credit Agricole gained 0.73%.
Renault also managed to buck the trend on the day, rising by 0.81%. The biggest mover on the day was Airbus, which rallied by 2.11%, supported by the announcement of a new single-aisle long-range plane. Scheduled for rollout in 2023, the single-aisle aircraft is reported to have a range of 4,700 nautical miles.
The Day Ahead
Economic data is on the heavier side in the day ahead. German and Eurozone economic sentiment figures due out later this morning will provide direction.
The Eurozone’s finalized May inflation figures and trade data are also due out later in the day.
We can expect German economic sentiment figures to be the key driver in the early part of the day.
From the U.S, housing starts and building permits are due out. While the numbers tend not to have a material impact on the majors, any particularly weak numbers could be yet another alarm bell. The housing sector is traditionally an economic barometer.
Outside of the stats, ECB Draghi will also speak in a number of scheduled speeches, which could deliver support should there be any EUR jawboning…
At the time of writing, the DAX was down by 12 points. The Dow Mini was up by 25 points.