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The Majors

It was another mixed day for the European majors on Thursday, with the EuroStoxx600 seeing its 9 day run come to an end.

The CAC40 and the DAX30 rose by 0.20% and by 0.11% respectively, while the EuroStoxx600 fell by 0.12%.

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Market reaction to the FED’s more hawkish outlook on monetary policy weighed on the majors. Monetary policy divergence, however, provided some comfort, with the CAC40 and DAX30 managing to recover from early losses.

Economic data from the Eurozone and the U.S had a relatively muted impact on the majors. This was in spite of weaker than expect jobless claim figures from the U.S and the pickup in Eurozone inflation.

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The Stats

It was a quiet day on the economic calendar, with stats limited to finalized inflation figures for the Eurozone.

In May, the annual rate of inflation accelerated from 1.6% to 2.0%, which was in line with prelim numbers. Consumer prices increased by 0.3% in the month of May, which was also in line with prelim figures. In April, consumer prices had risen by 0.6%.

According to Eurostat,

  • The lowest annual rates were registered in Greece (-1.2%), Malta (-0.2%), and Portugal (0.5%).
  • Luxembourg (+4.0%) registered the highest annual rate of inflation.
  • In May, the highest contribution to the annual euro area inflation rate came from energy (+1.19 pp).
  • There were also contributions from services (+0.45 pp), non-energy industrial goods (+0.19 pp), and food, alcohol, & tobacco (+0.15 pp).

From the U.S

Economic data included Philly FED Manufacturing PMI numbers and the weekly jobless claim figures.

In June, the Philly FED Manufacturing PMI fell from 31.5 to 30.7 versus a forecasted fall to 31.0.

While the headline index declined, the employment sub-index was on the rise. The sub-index jumped from 19.3 to 30.7.

Jobless claims figures disappointed, however.

In the week ending 11th June, initial jobless claims rose from 375k to 412k. Economists had forecast a decline to 359k.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Daimler and Volkswagen rose by 0.95% and 0.69% respectively, with BMW ending the day up by 0.24%. Continental bucked the trend, however, falling by 0.17%.

It was also a mixed day for the banks. Deutsche Bank fell by 1.85%, while Commerzbank rose by 0.91%

From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole rose by 1.02% and by 0.99% respectively. Soc Gen saw a more modest 0.38% gain on the day.

It was a relatively bullish day for the French auto sector. Stellantis NV and Renault ended the day with gains of 0.34% and 0.14% respectively.

Air France-KLM slipped by 0.52%, while Airbus SE rose by 0.46%.

On the VIX Index

It was a back into the red for the VIX on Thursday, marking the first day in the red of the week.

Partially reversing a 6.64% rise from Wednesday, the VIX fell by 2.20% to end the day at 17.75.

The NASDAQ rose by 0.87%, while the Dow and the S&P500 ended the day down by 0.62% and by 0.04% respectively.

The Day Ahead

It’s a particularly quiet day ahead on the European economic data front.

There are no major stats due out of the Eurozone to provide the majors with direction. From the U.S, there are also no major stats, leaving the majors to take their cues from the U.S markets late in the day.

Away from the economic calendar, we can expect greater sensitivity to any central bank chatter on the day.

The markets will also need to monitor any news up dates from Capitol Hill.

With no major stats to consider, expect the majors to take their cues from the U.S markets later in the day.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 1 point, while the DAX was up by 8 points.

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

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