European Equities: Economic Data, COVID-19, and Capitol Hill to Drive the MajorsEconomic data, COVID-19 news, and updates from Capitol Hill on the COVID-19 stimulus package will be the key drivers on the day.
Friday, 14th August
French CPI (MoM) (Jul) Final
French HICP (MoM) (Jul) Final
Eurozone GDP (YoY) (Q2) 2nd Estimate
Eurozone GDP (QoQ) (Q2) 2nd Estimate
Eurozone Trade Balance (Jun)
It was a bearish day for the European majors on Thursday, which failed to make it 5 consecutive daily gains. The EuroStoxx600 and the CAC40 fell by 0.63% and by 0.61% respectively, with the DAX30 declining by 0.50%.
With a lack of material stats from the Eurozone to provide direction, a continued lack of progress on Capitol Hill weighed. Failure to deliver further support, following Trump’s executive orders, will be a test for the U.S economy and consumption.
While the initial jobless claims were better than expected, continuing jobless claims sat at 15,486k, which is still a staggering number. Back in March, continuing jobless claims had stood at sub-2m before hitting an all-time a COVID-19 high 25,073k in May.
News of new COVID-19 spikes added the market angst on the day.
It was another relatively quiet day on the Eurozone economic calendar. Key stats included finalized July inflation figures for Germany and Spain.
From Germany, consumer prices fell by 0.5% in July, which was in line with prelim figures. In June, consumer prices had risen by 0.6%. The July decline left consumer prices down by 0.1%, year-on-year.
Things were not much better from Spain. Consumer prices fell by 0.9% in July, which was in line with prelim figures. Year-on-year, consumer prices were down by 0.6%. In June consumer prices had risen by 0.5%, month-on-month, while having fallen by 0.3%, year-on-year.
From the U.S
Economic data included July’s import and export price index figures and the all-important weekly jobless claims.
The focus was on the weekly jobless claims figures late in the European session.
In the week ending 7th August, initial jobless claims stood at 963k, which was down from 1,191k in the week prior. Economists had forecast jobless claims to sit at 1,120k
The better than expected figures provided some support to the European majors late in the session.
The Market Movers
For the DAX: It was a bearish day for the auto sector on Thursday. BMW and Volkswagen fell by 1.04% and by 1.35% respectively to lead the way. Continental and Daimler saw more modest losses of 0.42% and 0.25% respectively.
It was also a bearish day for the banks. Deutsche Bank fell by 1.59%, with Commerzbank sliding by 2.46%.
From the CAC, it was a bearish day for the banks. Credit Agricole and BNP Paribas slid by 2.21% and by 2.00% respectively. Soc Gen saw a more modest 0.80% loss on the day.
It was also a bearish day for the French auto sector. Peugeot and Renault fell by 1.54% and by 2.79% respectively.
Air France-KLM slipped by 0.30%, with Airbus SE seeing a 2.16% loss on the day.
On the VIX Index
It was a 2nd consecutive day in the red for the VIX on Thursday. A 0.67% fall marked a 9th day in the red out of 10. Following on from a 7.28% decline on Wednesday, the VIX ended the day at 22.13.
The losses for the Dow and S&P500 came in spite of better than expected jobless claims figures. A failure to progress on delivering the COVID-19 stimulus package weighed on risk sentiment on the day.
The S&P500 and Dow fell by 0.20% and by 0.29% respectively, while the NASDAQ rose by 0.27%.
The Day Ahead
It’s a relatively busy day ahead on the Eurozone economic calendar. Key stats include the Eurozone’s 2nd estimate GDP numbers for the 2nd quarter and June trade figures.
Finalized July inflation figures from France are also due out but will likely have a muted impact on the majors.
While there will be some interest in the trade date, the markets will be looking for an upward revision to the GDP numbers…
From the U.S, July’s retail sales and industrial production figures are due out along with prelim consumer sentiment numbers for August.
Expect plenty of influence from the numbers.
2nd quarter unit labor costs and nonfarm productivity numbers are also due out but will likely have a muted impact.
From the Asian session, economic data from China will set the tone. July’s industrial production and retail sales figures will be key drivers.
Away from the economic calendar, geopolitics, COVID-19 news, and updates from Capitol Hill will continue to be in focus.
In the futures markets, at the time of writing, the Dow was up by 48 points.
For a look at all of today’s economic events, check out our economic calendar.