European Equities: Futures Point to some Relief with No Stats to Rock the Boat

The Majors

Support kicked in on Tuesday, but it was all too brief with the European seeing a 4^th consecutive day in the red.

The markets were initially buoyed by news from the U.S of Trump’s plans to deliver significant support, including payroll tax relief.

Any upside seen in the early part of the European session faded, however, as the markets considered what impact the support would have.

Concerns over the continued spread of the coronavirus overshadowed the stats on the day and any stimulus plans.

The CAC40 led the way down, falling by 1.51%, with the DAX30 and EuroStoxx600 declining by 1.41% and 1.14% respectively.

For the European majors, the EU’s 2^nd largest manufacturer is in shutdown mode and cases across the region’s largest manufacturer, Germany, have been on the rise this week.

It certainly doesn’t bode well and, while we have seen the eternal optimists ever-present, this sell-off may have more legs.

The Stats

It was a relatively busy day on the Eurozone economic calendar on Tuesday.

Key stats included French payroll figures for the 4^th quarter and 3^rd estimate Eurozone GDP numbers for the 4^th quarter.

The markets brushed aside the 4^th quarter numbers, however, with 1^st quarter numbers of far greater interest.

There were no stats from the U.S to influence later in the day.

The Market Movers

For the DAX: it was a mixed day for the auto sector. BMW fell by 1.35%, while Daimler and Volkswagen rose by  1.66% and 1.11% respectively. Continental saw a more modest 0.23% gain.

It was a positive day for the banks, however, with Commerzbank and Deutsche Bank rising by 3.19% and 0.48% respectively.

Deutsche Lufthansa ended the day down by 1.00%.

From the CAC, it was a mixed day for the banks. BNP Paribas and Soc Gen rose by 2.50% and 2.97% respectively. Credit Agricole bucked the trend on the day, however, with a 0.28% loss.

It was also a mixed day for the auto sector, with Peugeot sliding by 2.90%, while Renault rose by 2.85%.

Air France-KLM fell by 1.93%, following on from Monday’s 9.29% slide.

On the VIX Index

A run of 3 consecutive days in the green came to an end, with the VIX sliding by 13.15% on Tuesday. Partially reversing a 29.85% jump on Monday, the VIX ended the day at 47.3.

A partial recovery across the U.S equity markets, driven by the U.S administration’s stimulus plans weighed on the VIX.

The S&P500 rallied by 4.94%, in what was a choppy day that had seen the S&P500 in the red in the early part of the session.

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone economic calendar. There are no material stats due out of the Eurozone to provide the majors with direction.

A lack of stats leaves the majors in the hands of the U.S and Asian sessions.

Expect monetary and fiscal policy chatter to influence, though it will ultimately boil down to the news wires.

In the futures markets, at the time of writing, the DAX was up by 100.5%, while the Dow was down by 406 points.