European Equities: Futures Point to another Shaky Start for the Markets

The Majors

It was a mixed start to the week for the majors on Monday.

The CAC40 rose by 0.15%, while the DAX30 and the EuroStoxx600 ended the day down by 0.32% and by 0.08% respectively.

Economic data from Germany disappointed on Monday, pegging the DAX30 back at the start of the week,

In spite of the threat of the Delta variant on the economic recovery, the losses for the DAX30 and EuroStoxx600 were modest.

Market optimism towards a pickup in economic activity, supported by last week’s private sector PMIs and a dovish ECB remained key drivers.

The Stats

Business sentiment figures from Germany were in focus early in the European session.

In July, the Ifo Business Climate Index fell from 103.7 to 101.2, versus a forecasted decline to 103.6.

According to the July survey,

• Sentiment towards current conditions improved, with the current conditions sub-index rising from 99.7 to 100.4.
• Concerns over the outlook weighed, however, with the business climate sub-index falling from 101.7 to 100.8.

At sector level,

• The index in manufacturing fell due to a marked decline in optimism in companies’ expectations. It was a 4^th consecutive monthly decline.
• By contrast manufacturer assessment of current conditions hit the highest level since Aug-2018.
• There was a similar trend across the services sector, with the business climate sub-index weakening, while firms were more satisfied with their ongoing business.

From the U.S

New home sales figures for June were in focus that had a muted impact on the European majors.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Daimler rose by 0.03% to buck the trend. Continental slid by 1.50%, however, with BMW and Volkswagen falling by 0.40% and by 0.89% respectively.

It was a bullish day for the banks. Deutsche Bank and Commerzbank ended the day up by 0.66% and by 1.41% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas rallied by 2.25%, with Credit Agricole and Soc Gen rising by 1.73% and by 1.78% respectively.

It was also a bullish day for the French auto sector. Stellantis NV and Renault ended the day up by 0.85% and by 1.04% respectively.

Air France-KLM rallied by 2.32%, with Airbus SE rising by 0.45%.

On the VIX Index

A run of 4 consecutive days in the red came to an end for the VIX on Monday.

Partially reversing a 2.77% fall from Friday, the VIX rose by 2.21% to end the day at 17.58.

The NASDAQ eked out a 0.03% gain, with the Dow and the S&P500 both ending the day up by 0.24% respectively.