European Equities: German Business Sentiment and COVID-19 in FocusIt’s a quieter day ahead on the economic calendar, with stats limited to German business sentiment figures. Away from the calendar, corporate earnings and COVID-19 will also provide direction.
Monday, 26th July
German Ifo Expectations JUL
Tuesday, 27th July
France Jobseekers Total JUN
Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Wednensday, 28th July
German GfK Consumer Confidence AUG
Thursday, 29th July
German Unemployment Change JUL
German Inflation Rate MoM Prel JUL
Friday, 30th July
French GDP Growth Rate QoQ Prel Q2
French Household Consumption MoM JUN
German GDP Growth Rate QoQ Flash Q2
German GDP Growth Rate YoY Flash Q2
French Inflation Rate YoY Prel JUL
Spanish GDP Growth Rate QoQ Flash Q2
Spanish GDP Growth Rate YoY Flash Q2
Italian GDP Growth Rate QoQ Adv Q2
Italian GDP Growth Rate YoY Adv Q2
Eurozone Inflation Rate Flash JUL
Eurozone GDP Growth Rate Flash Q2
It was a bullish end to the week for the majors on Friday.
The CAC40 rose by 1.35%, with the DAX30 and the EuroStoxx600 ending the day up by 1.00% and by 1.09% respectively.
A further pickup in private sector activity across the Eurozone supported the majors at the end of the week.
With Monday’s sell-off a distant memory, optimism towards the earnings season and sentiment towards ECB monetary policy also delivered yet more upside.
The gains came in spite of disappointing PMI numbers from France, the UK, and from the U.S.
French, German, and Eurozone private sector PMIs were in focus on Friday.
The French manufacturing PMI fell from 59.0 to 58.1, with the services PMI falling from 57.8 to 57.0.
Economists had forecast PMIs of 57.9 and 58.7 respectively.
From Germany, the manufacturing PMI rose from 65.1 to 65.6, with the services PMI rising from 57.5 to 62.2.
Economists had forecast PMIs of 63.7 and 59.1 respectively.
For the Eurozone, the manufacturing PMI fell from 63.4 to 62.6, while the services PMI rose from 58.3 to a 181-month high 60.4.
Economists had forecast PMIs of 62.5 and 59.6 respectively.
According to the prelim Markit Survey,
- The composite PMI rose to a 252-month high in July, according to prelim figures.
- Business activity accelerated for a 4th consecutive month, supported by a continued easing of COVID-19 restrictions.
- Demand was on the rise, with new order growth for the private sector at its fastest since May 2000.
- Firms hired staff for a 6th consecutive month, with the pace of hiring the 2nd steepest since Jan-2018.
- Average selling prices for goods and services rose at a near-term record pace, reflecting supply constraints.
From the U.S
Prelim private sector PMI numbers for July were also in focus.
The services PMI fell from 64.6 to 59.8, while the manufacturing PMI rose from 62.1 to 63.1.
As a result, the composite PMI slid from 63.7 to 59.7, with the all-important services PMI weighing heavily.
The Market Movers
For the DAX: It was a bullish day for the auto sector on Friday. Daimler rallied by 5.00% to lead the way, supported by a broker upgrade to buy. Volkswagen and Continental rose by 2.66% and by 2.35% respectively, with BMW gaining 2.06%.
It was a mixed day for the banks, however. Deutsche Bank rose by 1.05%, while Commerzbank ended the day down by 0.04%.
From the CAC, it was a bullish day for the banks. Soc Gen rallied by 1.83%, with BNP Paribas and Credit Agricole rising by 1.18% and by 1.09% respectively.
It was also a bullish day for the French auto sector. Stellantis NV and Renault ended the day up by 1.04% and by 0.97% respectively.
Air France-KLM slipped by 0.28%, while Airbus SE rose by 1.81%.
On the VIX Index
It was a 4th consecutive day in the red for the VIX on Friday.
Following a 1.23 decline on Thursday, the VIX fell by 2.77% to end the day at 17.20.
The Dow rose by 0.68%, with the NASDAQ and the S&P500 ending the day up by 1.04% and by 1.01% respectively.
The Day Ahead
It’s a relatively quiet day ahead on the economic calendar. Business sentiment figures from Germany are due out early in the European session,
Expect the headline Ifo Business Climate Index to have the greatest impact.
From the U.S, housing sector numbers, due out late in the session, should have a muted impact on the European majors.
Away from the economic calendar, corporate earnings and COVID-19 news updates will also influence, however.
In the futures markets, at the time of writing, the Dow Mini was down by 1 point.
For a look at all of today’s economic events, check out our economic calendar.