It's a quieter day ahead on the economic calendar. German retail sales figures will draw interest later this morning. A lack of stats from the U.S will also give FOMC chatter greater weighting.
German Retail Sales (MoM) (Apr)
Spanish Services PMI (May)
Italian Services PMI (May)
French Services PMI (May) Final
German Services PMI (May) Final
Eurozone Markit Composite PMI (May) Final
Eurozone Services PMI (May) Final
German IHS Markit Construction PMI (May)
Eurozone Retail Sales (MoM) (Apr)
ECB President Lagarde Speaks
It was bullish day for the European majors on Tuesday, with economic data from the Eurozone delivering support.
The DAX rose by 0.95%, with the CAC40 and the EuroStoxx600 seeing gains of 0.66% and 0.75% respectively.
Economic data from early in the session continued to fuel market optimism over the economic outlook.
Manufacturing sector PMIs from China and the Eurozone and unemployment figures from Germany and the Eurozone were all skewed to the positive.
The ECB’s assurances of unwavering support also limited the impact of a further pickup in inflationary pressure.
It was a particularly busy start to the day on the economic data front. From the Eurozone, manufacturing sector PMIs and German unemployment figures influenced.
Unemployment and inflation figures for the Eurozone were also in focus.
In May, Spain’s manufacturing PMI increased from 57.7 to 59.4, with Italy’s PMI rising from 60.7 to 62.3.
Economists had forecast PMIs of 59.5 and 62.0 respectively.
Finalized PMIs from France, Germany, and the Eurozone also drew attention.
Germany’s PMI fell from 66.2 to 64.4, which was up from a prelim 64.0.
France’s manufacturing PMI increased from 58.9 to 59.4, up from a prelim 59.2.
A pickup in manufacturing sector activity in Italy and Spain and upward revisions to French and German PMIs led to an upward revision to the Eurozone’s manufacturing PMI.
In May, the Eurozone’s manufacturing PMI increased from 62.9 to a new record high 63.1, which was up from a prelim 62.8.
According to the Eurozone’s Markit Survey,
By Country:
Employment figures from Germany were also skewed to the positive.
In May, unemployment fell by 15k, reversing an 8k rise from April. As a result of the fall, the unemployment rate held steady at 6.0%, which was in line with forecasts. Economists had forecast a more modest 9k fall in unemployment, however.
In April, the Eurozone’s unemployment rate fell from 8.1% to 8.0%. Economists had forecast the unemployment rate to hold steady at 8.1%.
According to Eurostat,
The Eurozone annual rate of inflation is expected to be 2.0% in May 2021, up from 1.6% in April, based on prelim figures.
According to Eurostat,
It was a relatively quiet day on the economic calendar following Monday’s holiday.
The manufacturing sector was also in focus, with the market’s preferred ISM Manufacturing PMI drawing attention.
In May, the ISM Manufacturing PMI increased from 60.7 to 61.2. Economists had forecast a modest rise to 60.8.
The market survey finalized manufacturing PMI was also out but had a muted impact on the broader markets.
For the DAX: It was a bullish day for the auto sector on Tuesday. Continental rallied by 4.03% to lead the way, with Volkswagen rising by 3.13%. BMW and Daimler ended the day up by 2.82% and by 2.62% respectively.
It was also a bullish day for the banks. Deutsche Bank rose by 2.51%, with Commerzbank gaining 1.52% on the day.
From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen rose by 1.54% and by 1.24% respectively, with Credit Agricole gaining 2.07%.
It was a relatively bullish day for the French auto sector, however. Stellantis NV and Renault ended the day with modest gains of 0.54% and 0.55% respectively.
Air France-KLM and Airbus SE found strong support, however, rising by 2.75% and by 1.97% respectively.
It was a 2nd consecutive day in the green for the VIX on Tuesday.
Following a 0.12% gain on Friday and Monday’s holiday, the VIX rose by 6.80% to end the day at 17.90.
The Dow eked out a 0.13% gain, while the NASDAQ and the S&P500 ended the day down by 0.09% and by 0.05% respectively.
It’s a quieter day ahead on the European economic data front, following Tuesday’s data dump.
The German economy is back in focus, with retail sales for April due out. The markets will be looking for a further pickup in spending to support the optimistic economic outlook.
From the U.S, there are no material stats to provide direction later in the day.
The lack of stats will likely leave the European majors in the hands of central bank chatter late in the day.
In the futures markets, at the time of writing, the Dow Mini was down by 21 points.
For a look at all of today’s economic events, check out our economic calendar.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.