European Equities: June Prelim Private Sector PMIs to Drive the MajorsThe futures say green but the PMIs will need to see further improvement for the majors to avoid a day in the red…
Tuesday, 23rd June
- French Manufacturing PMI (Jun) Prelim
- French Services PMI (Jun) Prelim
- German Manufacturing PMI (Jun) Prelim
- German Services PMI (Jun) Prelim
- Eurozone Manufacturing PMI (Jun) Prelim
- Eurozone Markit Composite PMI (Jun) Prelim
- Eurozone Services PMI (Jun) Prelim
Wednesday, 24th June
- German IFO Business Climate Index (Jun)
Thursday, 25th June
- GfK German Consumer Climate (Jul)
It was a bearish start to the week for the European majors on Monday. The EuroStoxx600 fell by 0.76% to lead the way down, with the CAC40 and DAX30 declining by 0.62% and 0.55% respectively.
There were no major stats from Europe or the U.S to spook the majors on the day.
Lingering concerns over last week’s spike in new COVID-19 cases and WIRECARD’s fall from grace contributed to the downside.
With June’s prelim private PMI numbers for France, Germany, and the Eurozone due out later today, there was also likely to have been some caution…
We have seen market hope provide the majors with plenty of support. A pullback in the PMIs from May’s partial recovery would bring into question the current levels seen across the majors…
It was a quiet day on the Eurozone economic calendar on Monday. There were no material stats to provide the European majors with direction on the day.
From the U.S
It was also a quiet day on the economic calendar, with economic data limited to existing home sales figures for May. In spite of disappointing numbers, the stats had a muted impact on the majors.
The Market Movers
For the DAX: It was a bullish start to the week for the auto sector. Continental and BMW led the way, rallying by 3.40% and by 2.45% respectively. Daimler and Volkswagen saw modest gains of 1.06% and 0.28% respectively.
It was a relatively bullish day for the banks. Deutsche Bank and Commerzbank saw gains of 0.69% and 0.10% respectively.
Deutsche Lufthansa returned to the red, however, reversing a 1.41% gain from Friday with a 3.17% loss on Monday.
The story of the day once more, however, was WIRECARD AG, which tumbled by another 45.98%.
From the CAC, it was a mixed day for the banks on Monday. Credit Agricole rose by 0.20% to buck the trend, while BNP Paribas and Soc Gen saw losses of 0.57% and 0.42% respectively.
The French auto sector also had a mixed session. Peugeot rallied by 3.56%, while Renault fell by 0.52%
Air France-KLM fell by 4.52%, with Airbus SE declining by 2.32%.
On the VIX Index
It was back into the red for the VIX on Monday. Following a 6.62% rise on Friday, the VIX fell by 9.54% to end the day at 31.77.
While concerns over a pickup in new COVID-19 cases in the U.S lingered early in the U.S session, it was a bullish end to the day.
Volumes were reportedly on the lighter side as investors digested fresh reports from U.S states of spikes in new COVID-19 cases.
On Monday, it was the Texas Governor who stepped forward to raise concerns over the rise in the number of new cases.
The S&P500 and Dow rose by 0.65% and by 0.59% respectively, with the NASDAQ gaining 1.11%.
The Day Ahead
It’s a busy day ahead on the Eurozone economic calendar. Key stats include June’s prelim private sector PMIs from France, Germany, and the Eurozone.
The markets will be looking for a bounce from May levels to support a speedier than expected economic recovery, fueled by fiscal and monetary support.
While the headline figures will be key, we can expect the services PMIs to be the key driver. Expect employment and new business to garner plenty of attention.
From the U.S, June’s prelim private sector PMIs will also draw plenty of attention and provide the majors with direction.
Expect the services PMI to have the greatest impact. The weekly jobless claims figures have continued to point to dire labor market conditions. This may pin back any marked recovery in the services sector, which is key for the U.S economy.
Away from the economic calendar, COVID-19 news updates and geopolitics will also need monitoring. While there was an uptick in new COVID-19 cases last week, numbers at the start of the week were marginally better. Reports from U.S states, however, could test risk sentiment should more governors raise red flags.
The Latest Coronavirus Figures
On Monday, the number of new coronavirus cases rose by 126,214 to 9,170,758. On Sunday, the number of new cases had risen by 131,020. The daily increase was lower than Sunday’s rise while up from 115,910 new cases from the previous Monday.
Germany, Italy, and Spain reported 952 new cases on Monday, which was up from 917 new cases on Sunday. On the previous Monday, just 855 new cases had been reported.
From the U.S, the total number of cases rose by 29,864 to 2,386,521 on Monday. On Sunday, the total number of cases had risen by 26,079. On Monday, 15th June, a total of 19,412 new cases had been reported.
In the futures markets, at the time of writing, the DAX was up by 132.5 points, while the Dow was up by 90 points.
For a look at all of today’s economic events, check out our economic calendar.