European Equities: U.S Stats, Geopolitics, and COVID-19 in Focus

The Majors

It was another bearish day for the European majors on Friday, with the CAC40 sliding by 1.58% to lead the way down. The EuroStoxx600 and the DAX30 saw more modest losses of 0.71% and 1.20% respectively.

Economic data the Eurozone took a back seat on Friday, as the markets responded to economic data from China.

The disappointing numbers from China set the tone for the day. Later in the day, news of the UK adding France to its quarantine list hit travel stocks.

From the U.S, there was also a lack of progress towards a 2^nd COVID-19 stimulus package that added to the downside.

The Stats

It was a relatively busy day on the Eurozone economic calendar. Key stats included the Eurozone’s 2^nd estimate GDP and June trade figures.

There were no revisions to the Eurozone’s GDP figures, with the economy contracting by 12.1% in the 2^nd quarter. On an annualized basis, the economy contracted by 15%. These were in line with forecasts.

The Eurozone’s trade surplus widened from €9.4bn to €21.2bn in June. The numbers failed to support the European majors, however, with the markets looking ahead to the U.S – China trade talks over the weekend.

From the U.S

Economic data included July’s retail sales and industrial production figures, together with August consumer sentiment numbers.

A further increase in retail sales and industrial production together with an uptick in consumer sentiment failed to support, however.

From China

Retail sales fell by 1.10%, following a 1.8% decline in June, which disappointed. Economists had forecast a 0.1% increase.

Industrial production also failed to impress, with a 4.8% year-on-year increase falling short of a 5.1% rise.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. Continental rose by 1.65% to buck the trend on the day. BMW and Daimler fell by 0.45% and by 0.97% respectively, with Volkswagen ending the day down by 0.17%.

It was a bearish day for the banks. Deutsche Bank fell by 0.99%, with Commerzbank declining by 0.29%.

From the CAC, it was a bearish day for the banks. Credit Agricole fell by 1.32% to lead the way down, with BNP Paribas and Soc Gen seeing more modest losses of 0.89% and 0.94% on the day.

It was also a bearish day for the French auto sector. Peugeot and Renault fell by 1.34% and by 0.57% respectively.

Air France-KLM slumped by 5.78%, however, following the UK’s plans to add France to the UK quarantine list. Airbus SE saw a more modest 1.62% loss on the day.

On the VIX Index

It was a 3^rd consecutive day in the red for the VIX on Friday. A 0.36% fall marked a 10^th day in the red out of 11. Following on from a 0.67% decline on Thursday, the VIX ended the day at 22.05.

The S&P500 and NASDAQ fell by 0.02% and by 0.21% respectively, while the Dow rose by 0.12%.

A lack of progress on Capitol Hill weighed on risk sentiment, as lawmakers continued to battle over the COVID-19 stimulus package.

Uncertainty ahead of U.S and China trade talks also pinned the majors back on the day.

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone economic calendar. There are no material stats to provide the European majors with direction.

A lack of stats will leave the European majors in the hands of economic data from the U.S. Stats include August’s NY Empire State Manufacturing Index figures.

Away from the economic calendar, there is still plenty to consider. Any further chatter following the postponement of U.S – China trade talks, news on the COVID-19 stimulus package, and COVID-19 numbers will also influence.

The Futures

In the futures markets, at the time of writing, the DAX was down by 45 points, while the Dow was up by 71 points.

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