European Equities: Futures Point to the Red, with Economic Data in Focus Today

The Majors

It was a bullish day for the European majors on Tuesday, with the DAX30 rallying by 2.51% to lead the way.

The CAC40 and EuroStoxx600 weren’t far behind, with the gains 2.40% and 2.15% respectively.

Market sentiment towards the downward trend in new COVID-19 cases and ongoing easing in lockdown measures delivered support.

The European majors were able to move past the rising tension between the U.S and China. A jump in crude oil prices supported the bullish sentiment on the day.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Tuesday. Key stats were limited to unemployment figures out of Spain that had a muted impact on the majors.

Spain reported a 282.9k increase in unemployment, following a 302.3k jump in the previous month. Figures for May and June will have far greater significance.

From the U.S, the market’s preferred April’s ISM Non-Manufacturing PMI drew interest, with the PMI falling from 52.5 to 41.8. Economists had forecast a slide to 36.8.

The Market Movers

For the DAX: It was a bullish day for the auto sector. Continental and Volkswagen rallied by 2.74% and by 3.01% to lead the way. BMW and Daimler saw more modest gains of 1.53% and 1.71% respectively.

It was a mixed day for the banks, however. While Deutsche Bank slipped by 0.62%, Commerzbank rallied by 3.02% on the day.

Deutsche Lufthansa slipped by just 0.02%, following a 0.73% fall on Monday.

From the CAC, the banking sector found much-needed support. BNP Paribas and Credit Agricole saw gains of 4.06% and 3.82% respectively, while Soc Gen rose by just 1.32%. The upside for BNP Paribas came in spite of net income sliding by 33% in the 1^st quarter, year-on-year.

The auto sector also ended the day in the green, with Peugeot and Renault rising by 3.54% and by 1.42% respectively.

Air France-KLM saw a 1.79% gain, partially reversing Monday’s 7.49% tumble, with Airbus SE ending the day with a 2.62% gain.

On the VIX Index

The VIX fell by 6.56% on Tuesday. Following on from a 3.28% decline on Monday, the VIX ended the day at 33.6.

A pickup in crude oil prices, driven by hopes that production cuts and increased demand would rebalance the scales, provided the majors with support. This was coupled with plans to further ease lockdown measures that continued to fuel demand for riskier assets.

U.S President Trump managed to change the narrative following a weekend of blame games with China. The focus returned to the U.S economy and plans to reopen the U.S economy.

The S&P500 rose by 0.90%, with the NASDAQ and Dow gaining 1.13% and 0.56% respectively on the day.

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. Key stats include April services PMI for Italy and Spain and March retail sales figures for the Eurozone.

Finalized April services and composite PMIs for France, Germany, and the Eurozone will also be in focus.

German factory order numbers for March, also due out in the early part of the day, will likely be brushed aside.

From the U.S, April ADP numbers could spook the markets, following what will likely be some quite dire service PMIs from the Eurozone.

Outside of the numbers, the markets will need to continue monitoring chatter from Beijing and Washington. Any renewed threat of tariffs or sanctions could test market risk sentiment after Tuesday’s gains.

The Latest Coronavirus Figures

On Tuesday, the number of new coronavirus cases rose by 81,537 to 3,720,873. On Monday, the number of new cases had risen by 74,217. The daily increase was higher than Monday’s rise and a 75,118 increase on the previous Tuesday.

France, Germany, Italy, and Spain reported 4,993 new cases on Tuesday, which was up from 3,642 new cases on Monday. On the previous Tuesday, 6,060 new cases had been reported. Germany reported just 569 news cases on Tuesday, marking a 4^th consecutive day of sub-1,000 rises.

From the U.S, the total number of cases rose by 25,189 to 1,235,456 on Tuesday. On Monday, the total number of cases had risen by 22,145. On Tuesday, 28^th April, the total new number of cases had risen by 25,258.

In the futures markets, at the time of writing, the DAX was down by 112 points, with the Dow down up 11 points.