European Equities: It’s All Eyes and Ears on the Oval Office. What’s Next?

A quiet day on the economic calendar leaves the Oval Office as the main area of focus. What’s the next move in the U.S – China trade war?
Bob Mason
Weltweiter Handel

Economic Calendar:

Monday, 20th May

  • German PPI m/m (Apr)

Tuesday, 21st May

  • Eurozone Consumer Confidence Flash

Wednesday, 22nd May

  • ECB President Draghi Speaks

Friday, 24th May

  • German GDP q/q (Q1) Final
  • German GDP y/y (Q1) Final
  • French Manufacturing PMI (May) Prelim
  • French Services PMI (May) Prelim
  • German Manufacturing PMI (May) Prelim
  • German Services PMI (May) Prelim
  • Eurozone Manufacturing PMI (May) Prelim
  • Eurozone Markit Composite PMI (May) Prelim
  • Eurozone Services PMI (May) Prelim
  • German Ifo Expectations
  • Ifo Current Conditions (German)
  • Ifo Business Climate (German)
  • ECB Monetary Policy Meeting Minutes

The Majors

The majors closed out the week on the back foot, though the losses weren’t enough to reverse gains made from earlier in the week.

The DAX led the way down on Friday, falling by 0.58% to end the week with a 1.49% gain. The CAC40 and EuroStoxx600 saw more modest losses of 0.18% and 0.36% respectively.

For the week, the CAC40 led the way, rallying by 2.08%, while the EuroStoxx600 gained 1.16%.

The Stats

On the data front, the stats were limited to the Eurozone’s April finalized inflation figures. The stats provided little support to the majors, in spite of inflation continuing to sit well below the ECB’s target.

According to Eurostat, the annual rate of inflation came in at 1.7% in April 2019, up from 1.4% in March 2019. The final figure was in line with prelim and forecasts.

Contribution to the uptick in inflation came from services (+0.86pp), energy (+0.51pp), food, alcohol & tobacco (+0.29pp) and non-energy industrial goods (+0.06pp).

The annual rate of core inflation, however, stood at just 1.3% in April, up from 1.0% in March, while in line with core inflation in both January and February of this year. From an ECB perspective, the core numbers are certainly not going to shift sentiment towards monetary policy near-term.

From elsewhere, economic data out of the U.S provided support. Impressive consumer sentiment numbers gave the majors a boost late on.

The Market Movers

For the DAX, it was red throughout the day, while the CAC managed to briefly move into positive territory in the early part of the session.

Weighing on the DAX through the day was BMW, which slid by 5.75% on the day. Daimler (-1.07%); Volkswagen (-0.64%) and Continental (-0.31%) also saw red on the day.

Joining autos in the red were bank stocks, with Deutsche Bank and Commerzbank ending the day down by 0.90% and 1.39% respectively.

BNP Paribas ended the day down by 1.25%, with UniCredit S.p.A sliding by 2.01%.

Negative sentiment towards the U.S – China trade war weighed on both sectors through the day.

The Day Ahead

It’s a particularly quiet day ahead on the economic data front. German wholesale inflation figures are due out later this morning.

The numbers are unlikely to have an impact on the majors through the day.

It was a mixed Asian session this morning, a lack of progress on the U.S – China trade talks continues to be a negative near-term. While there are hopes of progress at next month’s G20 Summit, the latest move against Huawei muddies the waters.

News of U.S companies halting the supply of software and components to Huawei in response to the U.S administration ban is also negative.

At the time of writing, the DAX30 was down by just 12 points. The U.S futures were positive, however, with the Dow Mini was up by 78 points.

U.S economic data has shown that the economy has been resilient to date, in spite of the extended trade war. It’s not been quite the same for the EU and China…

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US