European Equities: Stats and Trade Talk to Wrap Up the Week

A Thursday speed bumps? Economic data out of the EU and U.S and trade war chatter remain the key drivers today.
Bob Mason
Light Board

Economic Calendar:

Friday, 7th June

  • German Industrial Production m/m) (Apr)
  • German Trade Balance (Apr)

The Majors

The European majors saw red for the 1st time in the week on Thursday. Leading the way down was the CAC40, which fell by 0.26%, closely followed by the DAX30 that ended the day down by 0.23%. The EuroStoxx600 saw a more modest loss of just 0.02% on the day.

In spite of the Thursday pullback, the majors have managed to claw back some of last week’s losses, assuming that there’s no meltdown later today.

While the U.S majors found support on hopes that tariffs on Mexico would be delayed to allow talks to continue, the European majors suffered at the hands of the ECB.

The Stats

Economic data was on the lighter side on Thursday. German factory orders provided direction ahead of finalized Eurozone GDP numbers for the 1st quarter.

German factory orders increased by 0.3% in April, coming in ahead of a forecasted 0.1%, whilst softer than an upwardly revised 0.8% increase in March.

According to figures released by Destatis,

  • Domestic orders increased by 0.8%, with foreign orders rising by 1.1% in April, month-on-month.
  • New orders from the Euro area fell by 5.8%, while new orders from other countries increased by 5.7%.
  • The monthly increase was attributed to a 0.9% increase in orders for capital goods and a 0.1% increase in new orders for consumer goods.
  • A 0.4% fall in new orders for intermediate goods was a drag in April.

Finalized Eurozone GDP numbers for the 1st quarter were in line with prelim figures, which had a muted impact on the majors as focus shifted to the ECB.


In line with expectations, the ECB held interest rates at 0%, margin facility lending at 0.25% and deposit facility rates -0.4%. While the ECB held rates unchanged, forward guidance shifted. The ECB announced that it will leave rates unchanged at least until the first half of next year. This was extended beyond a previous hold through 2019.

While the forward guidance was unexpected, the ECB delivered on its round 3 of LTLRO, which provided initial support for the majors in spite of a rise in the EUR.

The extended hold on rates through to mid-2020 ultimately weighed, however, pulling the majors into the red. The ECB maintained a dovish tone, with Draghi giving assurances that the ECB would do more should the need arise but it wasn’t vintage Draghi jawboning.

In a rare occurrence, the EUR actually gained 0.49% on ECB press conference day, in spite of the rollout of round 3 of the TLTRO and negative sentiment towards the economy.

The Market Movers

It was a relatively choppy day for the DAX. The DAX had found support from better than expected factory orders numbers out of Germany and improved sentiment towards the Trump trade war. The ECB ultimately weighed. The DAX saw a 0.8% gain reverse to a 0.68% loss before finding support late in the day.

Bank and auto stocks were once in the firing line. Deutsche Bank and Commerzbank fell by 2.48% 1.28% respectively. Daimler and BMW were also amongst the worst performing stocks, falling by 0.93% and by 0.6% respectively. Continental saw more modest losses of 0.24%, with Volkswagen down by just 0.13%.

From the CAC, BNP Paribas slid by 1.74%, with Credit Agricole also seeing heavy losses, down by 1.68%. Renault was the worst performer on the day. Renault slid by 6.41% on news of Fiat Chrysler pulling out of merger talks.

The Day Ahead

It’s a relatively busy day on the economic calendar.

On the data front, German and French industrial production figures and trade data are due out.

We can expect the focus to be on the German numbers due out ahead of the market open.

From outside of the Eurozone, U.S nonfarm payroll and wage growth figures will also provide direction later in the day. Weak numbers would support a sooner rather than later move by the FED…

At the time of writing, the DAX30 was up 60.5 points, with the Dow Mini up by 27 points.

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

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.
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.