Bob Mason
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Economic Calendar:

Tuesday, 16th April 2019

  • German ZEW Current Conditions (Apr)
  • German ZEW Economic Sentiment (Apr)
  • Eurozone ZEW Economic Sentiment (Apr)

Wednesday, 17th April 2019

  • Italian CPI m/m (Mar) Final
  • Core CPI y/y (Mar) Final (Eurozone)
  • CPI m/m (Mar) (Eurozone)
  • CPI y/y (Mar) Final (Eurozone)
  • Trade Balance (Feb) (Eurozone)

Thursday, 18th April 2019

  • German PPI m/m (Mar)
  • French Manufacturing PMI (Apr) prelim
  • French Services PMI (Apr) prelim
  • German Manufacturing PMI (Apr) prelim
  • German Services PMI (Apr) prelim
  • Manufacturing PMI (Apr) prelim (Eurozone)
  • Markit Composite PMI (Apr) prelim (Eurozone)
  • Services PMI (Apr) prelim (Eurozone)

Friday, 19th April 2019

  • N/A

The Majors

Following a positive end to last week, the European majors kicked off the week in the green.

Leading the way was the DAX, which managed to reverse last week’s 0.08% loss with a 0.17% gain. The EuroStoxx50 and CAC40 weren’t far behind, with gains of 0.15% and 0.11% respectively.

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There were no material stats out of the Eurozone to influence risk sentiment and the major bourses through the day. With no material stats released out of the U.S, corporate earnings remained a key driver, leading to a choppier session ahead of a data deluge out of China on Wednesday.

Across the majors, amongst the leaders on the DAX were Volkswagen and BMW, with gains of 0.82% and 0.31% respectively. The upside came from market expectations of an imminent U.S – China trade agreement.

Mixed earnings results out of the U.S led to a pullback in financial stocks late on to limit the upside on the day. Both Citi and Goldman Sachs earnings brought into question the bullish sentiment across the broader market.

In spite of the mixed results, Commerzbank and BNP Paribas rose by 1.26% and 1.16% on the day, with Deutsche Bank eking out a 0.18% gain. Financial and Resource stocks across Europe are expected to see a boost should a U.S – China trade deal be rolled out.

The good news on the day was the fact that the European majors managed to hold onto positive territory after a brief dip into the red.

The Day Ahead

Following a quiet start to the week, things get a little more interesting. Economic data due out of the Eurozone includes April consumer sentiment figures for Germany and the Eurozone.

Following a particularly poor reading for March, forecasts are for consumer sentiment to see a marked improvement. The improvement is anticipated in spite of economic data out of Germany continuing to disappoint.

Strong labor market conditions in Germany and hopes of a resolution to the U.S – China trade war may well contribute. The Brexit extension to 31st October will likely be the main driver for a rebound in consumer sentiment, however.

On the earnings front, Bank of America and Netflix are due to release their quarterly earnings. Netflix could send the markets into a spin if the outlook paints a dire picture as Disney moves into space.

The Asian majors hit pause through the early part of the day. While the ASX200 and Nikkei were up 0.45% and 0.17% respectively, the Hang Seng and CSI300 were flat.

At the time of writing, the futures were in the green. The DAX30 was up 23 points, with the CAC40 is pointing to a 10.5 point gain at the open.

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