European Equities: The Bulls Will Be Looking To Springboard off the Asian SessionWith Germany on holiday today, it will be down to the CAC40 to follow the Asian majors into positive territory later this morning.
Wednesday, 12th June
- Spanish CPI (YoY) (May)
- Spanish HICP (YoY) (May)
Thursday, 13th June
- German CPI (MoM) (May)
- Eurozone Industrial Production (MoM) (Apr)
Friday, 14th June
- French CPI (MoM) (May)
- French HICP (MoM) (May)
- Italian CPI (MoM) (May)
The European majors closed out the week on a high note on Friday, with the CAC40 leading the way, rising by 1.62%. The DAX30 and EuroStoxx600 saw more modest gains of 0.77% and 0.93% respectively.
Market reaction to news of an agreement between the U.S and Mexico and disappointing data out of the U.S provide direction on the day.
For the week, the CAC40 and DAX30 rose by 3% and 2.72% respectively.
Economic data out of the Eurozone was on the lighter side on Friday, with key stats limited to German industrial production and trade data.
There was no support from the European stats on the day, with industrial production sliding by 1.9% in April.
According to Destatis, the production of intermediate goods and production of capital goods slid by 2.1% and by 3.3% respectively. The production of consumer goods fell by just 0.8% month-on-month. Year-on-year, industrial production fell by 1.8% in April.
Trade data also disappointed. Germany’s trade surplus narrowed from €20bn to €17bn in April, raising yet another economic red flag.
According to figures released by Destatis, exports fell by 3.7% month-on-month, while imports fell by 1.3%. Year-on-year, exports fell by 0.5%, while imports increased by 2.1%.
- German exports to Euro countries fell by 0.5% in April, while imports from Euro countries increased by 2.5%, month-on-month.
- Exports of good to countries outside of the EU increased by 4% year-on-year, while imports increased by just 2.4%.
From outside of the U.S, U.S wage growth and nonfarm payrolls also came in worse than forecasted, with just 75,000 jobs added in May. Wage growth eased to 3.1% year-on-year, the disappointing numbers raised the stakes for the FED to act sooner rather than later, ultimately providing support to the European and U.S markets.
The Market Movers
In spite of the Friday gain, auto stocks continued to struggle on Friday.
On the DAX, BMW and Volkswagen were amongst the worst performing, falling by 0.56% and by 0.43% respectively. Continental and Daimler managed to avoid red with gains of 0.13% and 0.02% respectively.
Bank stocks were also mixed, with Deutsche Bank rising by 0.05%, while Commerzbank fell by 0.26%. Weak economic data out of the Eurozone and the U.S provided little support to the sector on the day.
From the CAC, BNP Paribas continued to see red, falling by 0.46%. Credit Agricole managed to partially reverse Thursday’s 1.68% slide, rising by 0.49%. Renault also found support, rising by 2.07% on the day.
The Day Ahead
There are no material stats due out of the Eurozone today, with economic data out of the U.S limited to April’s JOLTs job openings.
The lack of stats will leave the CAC40 and EuroStoxx600 in the hands of sentiment towards trade and monetary policy on the day. German’s Frankfurt Stock Exchange is closed for the day, which will likely lead to lower volumes on the day.
At the time of writing, the Dow Mini was up by 63 points, with the Hang Seng leading the way amongst the Asian majors, up by 2.03%.