European Equities: Eurozone and U.S Economic Data in Focus

The lack of stats left the focus on economic data from the U.S and FED Chair Powell’s speech from Jackson Hole.

Through the early part of the day, the European majors saw red as a result, with the markets apprehensive. Expectations were for the FED to lay out its new monetary policy approach on Thursday.

From the U.S

It was another relatively busy day on the economic calendar. Key stats included 2^nd estimate GDP figures for the 2^nd quarter and the weekly jobless claims.

According to 2^nd estimate figures, the U.S economy contracted by 31.7% in the 2^nd quarter. This was up from the 1^st estimate of 32.5% contraction. In the 1^st quarter, the economy had contracted by 5%.

On the employment front, initial jobless claims came in at 1.006m in the week ending 21^st August. This was down from 1.104m in the previous week while coming in above a forecasted 1m.

The continuing jobless claims fell from a downwardly revised 14,758k to 14,535k in the week.

For the European majors, it was FED Chair Powell’s speech that was the main event. There was no support, however, with the markets having largely anticipated the FED’s latest shift in policy.

Under the new framework, the FED will look to achieve an average 2% inflation rate over time. This would mean that the FED would allow inflation to offset periods of low inflation by hitting above 2% levels. The FED would also support strong labor market conditions and not allow for a fall from maximum levels.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. BMW and Volkswagen rose by 0.42% and by 0.50% respectively, while Continental and Daimler saw losses of 0.55% and 0.22% respectively.

It was a bearish day for the banks. Deutsche Bank and Commerzbank declined by 0.76% and by 0.82% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas and Soc Gen fell by 1.11% and by 1.22% respectively, with Credit Agricole ending the day down by 0.58%.

It was also a bearish day for the French auto sector. Peugeot slid by 1.97%, with Renault falling by 0.72%.

Air France-KLM and Airbus SE bucked the trend, rising by 2.41% and by 2.66% respectively.

On the VIX Index

It was a 2^nd consecutive day in the green for the VIX on Thursday. Following on from a 5.63% gain on Wednesday, the VIX rose by 5.16% to end the day at 24.47.

The S&P500 and Dow rose by 0.17% and by 0.57% respectively, while the NASDAQ ended the day down by 0.34%.

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. Key stats include Germany’s consumer climate figures and French GDP, consumer spending and inflation figures.

We would expect Germany’s GfK consumer climate and French consumer spending figures to have the greatest influence.

From the U.S, finalized August consumer sentiment figures and July personal spending and inflation numbers will also influence.

Speeches from the Jackson Hole Symposium and from the U.S administration will also need monitoring on the day.

The Futures

In the futures markets, at the time of writing, the Dow was up by 44 points.

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