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Bob Mason
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Economic Calendar:

Tuesday, 11th August

German ZEW Current Conditions (Aug)

German ZEW Economic Sentiment (Aug)

Eurozone ZEW Economic Sentiment (Aug)

Wednesday, 12th August

Italian CPI (MoM) (Jul) Final

Eurozone Industrial Production (MoM) (Jun)

Thursday, 13th August

German CPI (MoM) (Jul) Final

Spanish CPI (YoY) (Jul) Final

Spanish HICP (YoY) (Jul) Final

Friday, 14th August

French CPI (MoM) (Jul) Final

French HICP (MoM) (Jul) Final

Eurozone GDP (YoY) (Q2) 2nd Estimate

Eurozone GDP (QoQ) (Q2) 2nd Estimate

Eurozone Trade Balance (Jun)


The Majors

It was a relatively bullish start to the week for the European majors on Monday. The CAC40 rose by 0.41% to lead the way, with the DAX300 and EuroStoxx600 gaining 0.10% and 0.30% respectively.

While there were no major stats to provide the majors with direction, there was plenty for the markets to consider.

Ahead of the European open, better than expected wholesale inflation figures from China supported riskier assets.

While the stats were positive, rising tension between the U.S and China pinned the majors back on the day.

Following Trump’s moves against China last week, China reacted by imposing sanctions of its own on 11 U.S lawmakers.

The good news, however, was that Beijing held back from targeting members of the U.S administration. Trade talks are reportedly scheduled for the end of the week…

From the weekend, news of Trump wielding executive powers to aid the unemployed also supported riskier assets.

The Stats

It was a quiet day on the Eurozone economic calendar. There were no material stats from the Eurozone to provide the majors with direction.

From the U.S

Economic data included June’s JOLTs job openings, which rose from 5.371m to 5.889m.

The stats ultimately had a muted impact, however, following last week’s jobless claims and nonfarm payroll figures.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Monday. Continental rallied by 3.37% to lead the way. BMW, Daimler, and Volkswagen saw more modest gains of 0.22%, 0.75%, and 0.33% respectively.

It was also a bullish day for the banks. Deutsche Bank rallied by 2.48%, with Commerzbank ending the day up by 1.43%.

From the CAC, it was a bullish day for the banks. Soc Gen rallied by 3.07%, with BNP Paribas and Credit Agricole rising by 0.94% and by 1.87% respectively.

It was also a bullish day for the French auto sector. Peugeot rose by 2.43%, with Renault rallying by 5.80%.

Air France-KLM rallied by 5.88%, with Airbus SE gaining 3.98% on the day.

On the VIX Index

It was a 7th consecutive day in the red for the VIX on Monday. Following on from a 1.94% loss on Friday, the VIX fell by 0.36% to end the day at 22.13.

While lawmakers failed to find an agreement, support came from Trump’s executive orders from the weekend, which looked to extend existing COVID-19 aid.

Tech stocks continued to struggle, however, as the markets responded to Trump’s latest move and China’s retaliation.

The S&P500 and Dow rose by 0.27% and by 1.30% respectively, while the NASDAQ fell by 0.39%.

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. Key stats include August’s ZEW Economic Sentiment figures for Germany and the Eurozone.

From the U.S, the markets will also consider wholesale inflation figures from later in the day.

Away from the economic calendar, geopolitics will also influence. While tensions between the U.S and China have built, trade talks are set to continue at the end of the week. That should provide some support, assuming that there is no further rhetoric or retaliatory moves between now and then.

The Futures

In the futures markets, at the time of writing, the DAX was up by 98 points, with the Dow up by 46 points.

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

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