European Equities: The Majors Are Set for another Jump at the OpenThe European majors are set for another positive open. Updates from trade talks and positive data through the Asian session supports risk appetite early on
Wednesday, 3rd April 2019
- Spanish Services PMI (Mar)
- Italian Services PMI (Mar)
- French Services PMI (Mar) Final
- German Services PMI (Mar) Final
- Eurozone Markit Composite PMI (Mar) Final
- Eurozone Services PMI (Mar) Final
- Eurozone Retail Sales (MoM) (Feb)
Thursday, 4th April 2019
- German Factory Orders (MoM) (Feb)
- ECB Monetary Policy Meeting Minutes
Friday, 5th April 2019
- German Industrial Production (MoM) (Feb)
It was another upbeat day for the European equity markets on Tuesday. The DAX led the day for a 2nd consecutive day. A 0.62% rise on Tuesday has given the DAX an early 1.98% gain for the 2nd quarter.
Not far behind were the CAC and EuroStoxx600, which rose by 0.33% and by 0.35% respectively.
Amongst the top performers on the DAX were the auto sector. Volkswagen (+0.48%) and BMW (+0.38%) contributed to the day’s gains. Joining the auto sector were financial stocks that managed to shake off some cobwebs. Commerzbank eeked out a 0.89% gain, with Deutsche Bank rising by 0.07%. BNP Paribas on the CAC also found support from the pickup in optimism.
A lighter day on the economic calendar left the markets to remain focused on the better than expected manufacturing PMI numbers out of China. Adding to the upside was optimism on trade negotiations between the U.S and China.
Spanish unemployment change figures reflected a sizeable fall in the number of unemployed. There were no other stats released out of the Eurozone on the day. While not of material significance to the European majors, anything positive buoyed risk sentiment on the day.
The European majors are certainly more sensitive to sentiment towards the Chinese economy than their U.S counterparts, which was reflected in the lackluster day in the U.S equity markets.
The Day Ahead
It’s a busier day ahead on the economic data front. Key stats through the day include service sector PMI numbers and Eurozone retail sales figures.
While the PMI numbers out of France, Germany, and the Eurozone are finalized numbers, any revisions will influence. PMI numbers out of Italy and Spain will likely have less of an impact earlier on.
Later this morning, the markets will need to keep an eye on retail sales figures for the Eurozone, though we would expect the impact on the equity markets to be muted.
Positive progress on trade talks between the U.S and China will be the key driver through the day. Reports of 90% of the deal being wrapped up drove risk appetite through the Asian session this morning
With the Asian equity markets seeing solid gains, the European majors are set to open on the bounce.
The futures markets are showing the DAX30 up 80.5 points, with the CAC40 up 37 points at the time of writing.
Following a disappointing day in the U.S on Tuesday, the U.S futures are also pointing to a jump at the open that will spur the European majors through to the U.S open.
While risk appetite has certainly returned at the turn of the quarter, the markets will need to monitor Brexit chatter through the day. ADP nonfarm employment change and service sector PMI numbers out of the U.S can also hit yields should the numbers raise any red flags.