The news wires will need to be market-friendly for the majors to brush off geopolitically woes on the day...
A bearish end to the week left the European majors in the red for the week. The DAX led the way down on the day, falling by 1.28% on Friday to end the week down by 1.5%. For the CAC40 and EuroStoxx600, the pair fell by 1.11% and 0.84% respectively.
For the week, the EuroStoxx600 saw the heaviest loss, falling by 1.7%, while the CAC40 fell by just 0.58%.
While the U.S – China trade war continued to pressure the global equity markets, it was Italian politics that weighed on Friday.
On the trade war front, U.S President Trump delivered with his usual end of week messages, stating that he was not ready to do a trade deal with China. Trump also said that the U.S was not prepared to do business with Huawei…
It was a relatively quiet day on the Eurozone economic calendar. Economic data was limited to Germany’s June trade data that came out ahead of the European open.
According to Destatis,
The figures reflected the ongoing troubles within Germany’s manufacturing sector and the effects of the extended U.S – China trade war.
Of less influence on the day were 2nd quarter nonfarm payroll figures out of France and finalized inflation figures out of Italy.
French nonfarm payrolls increased by 0.3% in the 2nd quarter, easing from a 0.4% rise in the 1st quarter. Out of Italy, consumer prices held steady in July, which was softer than a forecasted 0.1% rise.
From the DAX, ThyssenKrupp was the worst performer on the day, sliding by 5.16%. The materials stock joined a broad-based resource stock sell-off on the day. Things were no much better for the auto sector, with Continental leading the way, falling by 2.43%. BMW and Daimler weren’t far behind with losses of 2.17% and 2.14% respectively. Volkswagen saw a more modest 1.53% fall on Friday.
From the banking sector, the Italian coalition government implosion and trade war chatter weighed. Deutsche Bank and Commerzbank slid by 1.83% and 2.63% respectively.
On the day, Bayer AG managed to buck the trend with a 4.33% rally, with the upside coming off the back of news of a possible Elanco Animal Health Inc. deal.
From the CAC, the banking sector also saw red on the day. Soc Gen led the way down, sliding by 2.15%. BNP Paribas and Credit Agricole fell by 1.33% and by 1.5% respectively. Renault also joined its German peers in the red with a 1.43% decline.
It’s a quiet day ahead on the Eurozone economic calendar. With no material stats due out of the Eurozone, the markets will likely focus on geopolitics through the day.
Chatter from the weekend on trade, Brexit and the Salvini’s call for a snap Italian general election are in play ahead of a busy week on the day front.
In the futures markets, the DAX was up by 78 points, while the Dow Mini was up by 40 points, at the time of writing.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.