European Equities: Economic Data from Germany and the U.S in FocusEconomic data from Germany and the U.S will influence. Going into the open, market reaction to the FED’s hold on policy and forward guidance will set the tone, however.
Thursday, 29th July
German Unemployment Change/Rate JUL
German Inflation Rate MoM Prel JUL
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Friday, 30th July
French GDP Growth Rate QoQ Prel Q2
French Household Consumption MoM JUN
German GDP Growth Rate Flash Q2
French Inflation Rate YoY Prel JUL
Spanish GDP Growth Rate Flash Q2
Italian GDP Growth Rate Adv Q2
Eurozone Core Inflation Rate Flash JUL
Eurozone GDP Growth Rate Flash Q2
Italian Inflation Rate MoM Prel JUL
Eurozone Inflation Rate Flash JUL
It was a bullish day for the majors on Wednesday.
The CAC40 rallied by 1.18%, with the DAX30 and the EuroStoxx600 ending the day up by 0.33% and by 0.66% respectively.
Following the early in the week sell-off across the Chinese markets, the Hang Seng and CSI300 steadied mid-week, providing support.
Corporate earnings were also in focus, with better-than-expected numbers delivering support to the majors on the day. From France, Capgemini (+3.77%) and Kering (+3.64%) delivered the upside for the CAC40.
German consumer sentiment was in focus going into the European open.
For August, the GfK Consumer Confidence Index held steady at -0.30. Economists had forecast a decline to -2.0.
According to the GfK survey,
- Following a 10-year high, economic expectations moderated in July, falling by 3.8 points to 54.6.
- Income expectations slipped by 5.1 points to 29 points, which was still up 10 points year-on-year.
- By contrast, the propensity to buy was on the rise, increasing by 1.4 points to 14.8. In spite of the rise, consumption propensity was still down by almost 28 points year-on-year.
From the U.S
From the U.S, trade data was in focus late in the European session. The numbers had a muted impact on the European majors, however.
There was caution ahead of the post-European close FOMC interest rate decision and press conference.
After the European close, the FED avoided delivering any market shocks.
In line with market expectations, the FED left monetary policy unchanged, while acknowledging that the economic recovery was progressing.
The Market Movers
For the DAX: It was a mixed day for the auto sector on Wednesday. BMW and Daimler fell by 0.08% and by 0.28% respectively. Continental and Volkswagen avoided the red, however, rising by 0.34% and by 0.60% respectively.
It was a bearish day for the banks, however. Deutsche Bank and Commerzbank ended the day down by 0.85% and by 0.35% respectively.
From the CAC, it was also a bearish day for the banks. Soc Gen fell by 0.41%, with BNP Paribas and Credit Agricole declining by 0.16% and by 0.22% respectively.
It was a bullish day for the French auto sector, however. Stellantis NV rose by 0.85%, with Renault ending the day up by 4.54%.
Air France-KLM and Airbus SE also found strong support, rising by 1.37% and by 2.65% respectively.
On the VIX Index
It was back into the red for the VIX on Wednesday, marking the first decline of the week.
Partially reversing a 10.13% jump from Tuesday, the VIX fell by 5.42% to end the day at 18.31.
The NASDAQ rose by 0.70%, while the Dow and the S&P500 ended the day down by 0.36% and by 0.02% respectively.
The Day Ahead
It’s a busier day ahead on the economic calendar. German unemployment and inflation figures are due out later today.
We can expect both sets of numbers to influence ahead of the U.S session.
From the U.S, weekly jobless claim and 2nd quarter GDP numbers will also influence.
Away from the economic calendar, corporate earnings and COVID-19 news updates will need monitoring, however.
In the futures markets, at the time of writing, the Dow Mini was up by 28 points.
For a look at all of today’s economic events, check out our economic calendar.