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Bob Mason

Economic Calendar:

Thursday, 2nd July

Eurozone Unemployment Rate (May)

Friday, 3rd July

Spanish Services PMI (Jun)

Italian Services PMI (Jun)

French Services PMI (Jun) Final

German Services PMI (Jun) Final

Eurozone Markit Composite PMI (Jun) Final

Eurozone Services PMI (Jun) Final


The Majors

It was a mixed day for the majors on Wednesday. The EuroStoxx600 rose by 0.24%, while the DAX30 and CAC40 slipped fell by 0.41% and by 0.18% respectively.

Economic data took a backseat in the early part of the European session. Concerns over how the €750bn Euro Recovery Fund will be disbursed tested the markets early on. Negative chatter on Brexit also weighed, as Merkel spoke of the rising chances of a no-deal Brexit.

On the positive, however, and limiting the downside for the DAX30 and CAC40 was upbeat news on a COVID-19 vaccine.

The Stats

It was a particularly busy day on the Eurozone economic calendar on Wednesday.

Key stats included June Manufacturing PMIs for Italy and Spain and German retail sales and unemployment figures.

For France, Germany, and the Eurozone there were also finalized June Manufacturing PMIs in focus.

Out of Germany

In May, retail sales jumped by 13.9%, reversing a 6.5% decline from April. Economists had forecast a 3.9% increase. According to figures released by Destatis, sales were up by 3.8% on the same month a year earlier.

In June, Germany’s unemployment rate rose from 6.3% to 6.4%. This was below a forecast of 6.6%. Unemployment increased by 69K, following a 238k rise in May. Economists had forecast a 120k increase.

Germany’s Manufacturing PMI came in at 45.2, which was up from a prelim 44.6. In May, the PMI had stood at 36.6.

The Rest of the PMIs

From Italy, the manufacturing PMI rose from 45.4 to 47.5, coming up short of a forecasted 47.7.

Spain’s manufacturing PMI rose from 38.3 to 49.0, which was well above a forecasted 45.1.

The French Manufacturing PMI came in at 52.3, which was up from a prelim 52.1 and 40.6 in May.

The Eurozone’s manufacturing PMI rose from a prelim 46.9 to 47.4. Economists had forecast a PMI of 46.9. In May, the PMI had stood at 39.4.

From the U.S

It was also a busy day, with economic data including June’s ADP nonfarm employment change and ISM Manufacturing PMI numbers.

In June, the ADP reported a 2.329m rise in nonfarm, following on from a 3.065m rise in May. Economists had forecast a 3m increase.

The ISM Manufacturing PMI increased from 43.1 to 52.6 in June. Economists had forecast a rise to 49.5.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. Continental and Daimler led the way, with losses of 3.27% and 1.68% respectively. BMW and Volkswagen fell by 1.19 and by 1.49% respectively.

It was also a bearish day for the banks. Deutsche Bank slid by 2.10%, while Commerzbank fell by just 0.18%.

WIRECARD AG returned to the red with a 38.95% loss following Tuesday’s 96.38% breakout.

From the CAC, it was a bearish day for the banks. BNP Paribas fell by 1.84% to lead the way down. Credit Agricole and Soc Gen saw more modest losses of 0.59% and 0.73% respectively.

The French auto sector also struggled after a bullish start to the week. Peugeot and Renault fell by 2.62% and by 4.78% respectively.

Air France-KLM and Airbus SE bucked the trend, with gains of 0.92% and 1.05% respectively.

On the VIX Index

It was a 3rd consecutive day in the red for the VIX, which fell by 5.95% on Wednesday. Following on from a 4.25% decline on Tuesday, the VIX ended the day at 28.62.

Positive stats from the U.S and news of progress towards a COVID-19 vaccine delivered the U.S major indexes with support.

The S&P500 and NASDAQ rose by 0.50% and by 0.95%, while the Dow slipped by 0.30%.

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. May unemployment figures are due out of the Eurozone that should have a muted impact on the majors.

Going into the European session, the markets responded further to the positive COVID-19 vaccine news.

From the U.S

It’s a busy day ahead. June’s nonfarm payrolls and unemployment rate are due out along with the weekly jobless claims.

Expect the stats to be a key driver on the day. Any weak numbers would send the European majors into the red.

Away from the economic calendar, COVID-19 news and geopolitics will also be key drivers… Expect some chatter from the U.S President following the NFP numbers.

The Latest Coronavirus Figures

On Wednesday, the number of new coronavirus cases rose by 210,499 to 10,794,377. On Tuesday, the number of new cases had risen by 201,507. The daily increase was higher than Tuesday’s rise and up from 174,860 new cases from the previous Wednesday.

Germany, Italy, and Spain reported 1,062 new cases on Wednesday, which was up from 934 new cases on Tuesday. On the previous Wednesday, 1,463 new cases had been reported.

From the U.S, the total number of cases rose by 51,607 to 2,779,460 on Wednesday. On Tuesday, the total number of cases had risen by 53,471. On Wednesday, 24th June, a total of 38,253 new cases had been reported.

The Futures

In the futures markets, at the time of writing, the DAX was up by 110 points, with the Dow up by 53 points.

For a look at all of today’s economic events, check out our economic calendar.

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