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Bob Mason
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Economic Calendar:

Monday, 6th July

German Factory Orders (MoM) (May)

Eurozone IHS Markit Construction PMI (Jun)

Eurozone Retail Sales (MoM) (May)

Tuesday, 7th July

German Industrial Production (MoM) (May)

Wednesday, 8th July

EU Economic Forecasts

Thursday, 9th July

German Trade Balance (May)

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The Majors

It was a bearish end to a bullish week for the European majors on Friday. With the U.S markets closed, market angst over COVID-19 resurfaced as news of new spikes hit the news wires.

The CAC40 fell by 0.84%, with the DAX30 and EuroStoxx600 ending the day with losses of 0.64% and 0.78% respectively.

Ahead of the European open, positive economic data from China and the region had delivered support to riskier assets.

Over the course of the European session, there was also negative chatter on policy and politics.

Adding to the negative sentiment on the day was news of disagreement amongst policymakers over the weighting of the ECB’s emergency bond-purchase program.

Political issues also resurfaced in France, with French President Macron asking for his government’s resignation. Macron named Jean Castex as his new prime minister in a bid to build voter support.

The Stats

It was a busy day on the Eurozone economic calendar on Friday. Key stats included June’s service sector PMIs from Italy and Spain. Finalized services and composite PMIs from France, Germany, and the Eurozone were also in focus.

Spain’s services PMI jumped from 27.9 to 50.2, with Italy’s PMI rising from 28.9 to 46.4.

Germany’s finalized PMI came in at 47.3, which was up from a prelim 45.8 and May 32.6.

From France, the services PMI came in at 50.7, revised up from a prelim 50.3 and up from 31.1 in May.

The Eurozone’s services PMI came in at 48.3, which was revised up from a prelim 47.3 and May 30.5.

Upward revisions and positive numbers from Italy and Spain supported a rise in the Eurozone’s composite from 31.9 to 48.5. This was also up from a prelim 47.5.

From the U.S

There were no stats from the U.S, with the U.S markets closed on Friday.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. BMW and Daimler rose by 1.19% and by 1.01% respectively. Continental and Volkswagen hit reverse, however, ending the day with losses of 1.01% and 0.69% respectively.

It was a bearish day for the banks. Deutsche Bank fell by 0.61%, with Commerzbank ending the day down by 0.05%.

WIRECARD AG found much-needed support after a 32.14% slide on Thursday. On Friday, WIRECARD AG gained 13.33%.

From the CAC, it was a bearish day for the banks. BNP Paribas and Soc Gen fell by 0.89% and by 1.54% to lead the way down. Credit Agricole saw a more modest 0.39% loss.

The French auto sector also saw red on Friday. Peugeot and Renault declined by 2.29% and by 1.37% respectively.

Air France-KLM bucked the trend on the day, rising by 1.03%, while Airbus SE fell by 1.17%.

On the VIX Index

The U.S markets were closed on Friday.

The Day Ahead

It’s a relatively busy day ahead on the Eurozone economic calendar. Key stats include German factory orders and Eurozone retail sales figures for May. Germany’s Construction PMI for June is also due out.

Barring particularly dire numbers, we would expect the stats to have a muted impact on the majors. We can expect June’s factory orders and retail sales figures to have a far greater impact next month…

From the U.S

The market’s preferred ISM Non-Manufacturing PMI will influence later in the day. In reality, however, the continued rise in new COVID-19 cases may raise the prospects of further lockdowns. Such an eventuality would mute the effect of positive economic data enjoyed by the markets in recent weeks.

Geopolitics

On the geopolitical risk front, there is also a marked increase in tension between the U.S and China to consider on the day.

A lack of chatter over the weekend and a pullback in the number of new COVID-19 cases on Sunday were positives, however.

The Latest Coronavirus Figures

On Sunday, the number of new coronavirus cases rose by 156,610 to 11,535,528. On Saturday, the number of new cases had risen by 393,825. The daily increase was lower than Saturday’s rise while up from 136,417 new cases from the previous Sunday.

Germany, Italy, and Spain reported 322 new cases on Sunday, which was down from 1,612 new cases on Saturday. On the previous Sunday, just 650 new cases had been reported.

From the U.S, the total number of cases rose by 40,401 to 2,976,171 on Sunday. On Saturday, the total number of cases had surged by 107,457. On Sunday, 28th June, a total of 35,905 new cases had been reported.

The Futures

In the futures markets, at the time of writing, the DAX was up by 253.5 points, with the Dow up by 226 points.

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

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