European Equities: Futures Point to a Negative Open as New COVID-19 Cases Rise

The Majors

It was another bullish day for the European majors on Tuesday, with the DAX30 rallying by 2.79% to lead the way. The CAC40 and EuroStoxx600 also found further support, rising by 2.12% and by 1.88% respectively.

Economic data took a back seat once more on Tuesday, with February figures continuing to be of little interest to the markets.

Coronavirus numbers at the start of the week had supported the upside on the day, with the downward trend in new cases continuing from Sunday.

The upside did come in spite of Japan calling a state of emergency that led to the government delivering a stimulus package.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Tuesday. Key stats were limited to Germany’s industrial production figures for February that had a muted impact on the majors.

Industrial production increased by 0.3% in February, following an upwardly revised 3.2% jump in January. Economists had forecast a 0.9% decline.

According to Destatis,

• Production in industry, excluding energy and construction, increased by 0.4%.
• Within industry, the production of intermediate goods increased by 0.8%, with the production of consumer goods rising by 1.8%.
• The production of capital goods fell by 0.3%, however.
• Outside industry, energy production increased by 2.7%, while the production in construction declined by 1.0%.

From the U.S, February JOLTs job openings also had a muted impact on the majors. February numbers were out of little interest following the latest employment figures.

The Market Movers

For the DAX: It was another bullish day for the auto sector. Daimler and Volkswagen led the way, rising by 1.56% and 1.46% respectively. BMW and Continental saw more modest gains of 0.24% and 1.06% respectively.

It was also another bullish day for the banks, with Commerzbank and Deutsche Bank rallying by 5.17% and by 3.16% respectively.

Deutsche Lufthansa jumped on the bandwagon, though the upside on the day was a more modest 0.90%.

From the CAC, it was also another bullish day for the banks. Credit Agricole rallied by 7.30% to lead the way, with BNP Paribas and Soc Gen rising by 4.31% and 4.48% respectively.

The auto sector continued to find further support. Peugeot rallied by 5.94%, with Renault gaining 2.39%.

Air France-KLM and Airbus SE also continued to benefit from the improved risk sentiment, with the pair rallying by 3.95% and 6.56% respectively.

On the VIX Index

The VIX saw its run of 3 consecutive days in the red come to an end on Tuesday. Reversing a 3.33% decline on Monday, the VIX rose by 3.23% to end the day at 46.7.

A pullback across the U.S equity markets on Tuesday delivered the upside on the day. The S&P500 gave up solid gains from the start of the day to end the day with a 0.16% loss.

A rise in the number of coronavirus related deaths contributed to the moves, with no March or April economic data to distract the markets.

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone economic calendar, with no material stats due out of the Eurozone.

From the U.S, there are also no stats to provide direction later in the day, with the FOMC meeting minutes due out after the European close.

On Tuesday, the total number of coronavirus cases across France, Germany, Italy, and Spain rose by 23,653 to 494,260. In the U.S, the total number of cases increased by 32,950 to 400,335. That took the total number of cases globally to 1,431,054.

Both France and Italy saw a sharp increase in the number of new cases on Tuesday, following promising numbers on Sunday and Monday.

In the futures markets, at the time of writing, the DAX was down by 127 points, with the Dow down by 82 points.