European Equities: Iran Sanctions and the G20 Remain in FocusA lack of stats from the Eurozone will leave geopolitics front and center. Consumer confidence numbers and FED Chatter will also need to be monitored.
Wednesday, 26th June
- GfK German Consumer Climate (Jul)
Thursday, 27th June
- Spanish HICP (YoY) (Jun)
- Eurozone Business Confidence
- German CPI (MoM) (Jun) Prelim
Friday, 28th June
- French Consumer Spending m/m (May)
- French CPI m/m (June) Prelim
- French HICP m/m (June) Prelim
- Spanish GDP q/q (Q1)
- Italian CPI m/m (Jun) Prelim
- Eurozone Core CPI y/y (Jun) Prelim
- Eurozone CPI y/y (Jun) Prelim
The European majors saw red at the start of the week. Leading the way down was the DAX, which slid by 0.53%. For the CAC40 and EuroStoxx600, the losses were more modest, with the pair ending the day down by 0.12% and by 0.25% respectively.
Rising tensions in the Middle East continued to pin back the European majors. Chatter from the Oval Office and the threat of fresh sanctions added to the market angst.
Economic data out of the Eurozone was on the heavier side on Monday.
Germany’s Business Climate Index and sub-indexes provided direction in the early part of the European session.
According to the June IFO Report,
- The IFO Business Climate Index fell from 97.9 to 97.4 in June, which was the lowest level since November 2014.
- In manufacturing, the business climate index fell further, attributed to falling new orders. The sub-index fell from 3.9 to 1.5. In June 2018, the sub-index stood at 24.2.
- The services sector also became less optimistic, with the service sector business climate sub-index falling from 21.0 to 20.0
- Sentiment towards current conditions improved marginally in June. The IFO Current Conditions Index rose from 100.6 to 100.8.
- By contrast, the IFO Expectations Index slid from 95.2 to 94.2.
While Germany’s Business Climate Index was in line with forecast, particularly weak sentiment added to the negative sentiment on the day.
The Market Movers
From the DAX, Daimler tumbled by 3.18% off the back of a profit warning to drag the auto sector into the red. Continental fell by 1.8%, with BMW and Volkswagen ended the day down by 1.2% and by 0.05% respectively.
Bank stocks were also in the red on the day. Deutsche Bank slid by 1.25%, while Commerzbank fell by 0.62%.
From the CAC, BNP Paribas slid by 0.71%, with Credit Agricole ending the day down by 0.34%. From the auto sector, Renault joined the German autos in the red with a 1% fall on the day.
The Day Ahead
There are no material stats due out of the Eurozone through the day.
The lack of stats will place focus on U.S consumer confidence figures due out later in the day.
Outside of the stats, we can expect the markets to continue to focus on chatter from Iran and the Oval Office. The rise in tensions could complicate trade talks between the U.S and China.
Exports to India and China account for the lion’s share of Iran’s oil exports. Trump could use Iran as a pawn to nudge trade talks with China along. The last thing that the U.S needs is a China – Iran allegiance to muddy the waters in the Gulf…
At the time of writing, the DAX was up by 18 points. The Dow Mini was up by 43 points.