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Bob Mason
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Economic Calendar:

Wednesday, 14th August

  • German GDP (YoY) (Q2)
  • German GDP (QoQ) (Q2)
  • French CPI (MoM) (Jul) Final
  • French HICP (MoM) (Jul) Final
  • Eurozone GDP (QoQ) (Q2)
  • Eurozone GDP (YoY) (Q2)
  • Eurozone Industrial Production (MoM) (Jun)

Friday, 16th August

  • Eurozone Trade Balance (Jun)

The Majors

The European equity markets found much-needed support on Tuesday, with geopolitical risk continuing to be the driving force across the financial markets.

Leading the way was the CAC40, which gained 0.99%, with the EuroStoxx600 and DAX30 rising by 0.54% and by 0.60% respectively.

News of the U.S administration delaying tariffs on clothes and certain apparel items until December provided the support on the day.

The gains on the day came in spite of continued protests and the threat of intervention from Beijing. On the day, the Asian equity markets saw red, reflecting market sentiment towards the U.S – China trade war ahead of Tuesday’s softer stance on tariffs.

The Stats

It was a relatively busy day on the Eurozone economic calendar on Tuesday. Key stats included ZEW economic sentiment figures for Germany and the Eurozone.

Of less influence on the day were finalized July inflation figures out of Germany and Spain.

According to the August ZEW survey, the German Economic Sentiment Index fell from -24.5 to -44.10 in August. Economists had forecast a decrease to -27.8. Germany’s ZEW Current Conditions Index slid from -1.1 to -13.5 in August.

For the Eurozone, the ZEW Economic Sentiment Index fell from -20.3 to -43.6, which was weaker than a forecasted fall to -21.7, and also weighing on the majors.

On the inflation front, the figures were brushed aside.

From the U.S, July inflation figures also failed to provide direction. The annual rate of core inflation picked up from 2.1% to 2.2%, with core consumer prices rising by 0.3%, month-on-month. Consumer prices had risen by 0.3% in June.

The Market Movers

From the DAX, Deutsche Bank led the way on the day, rallying by 3.68%, while Commerzbank ended the day up by just 0.56%. The auto sector also found strong support. Volkswagen led the way, rising by 2.19%. Daimler (+1.85%), BMW (+0.91%), and Continental (+2.06%) also saw green on the day.

The games came from the news from the U.S administration, with the DAX and components having sat in the red through the morning part of the session.

From the CAC, the banking sector also made solid gains. Soc Gen led the way, surging by 2.71%. BNP Paribas and Credit Agricole rose by 1.78% and by 1.4% respectively. Renault also joined its German peers in the green with a 0.90% gain.

The Day Ahead

It’s another busy day ahead on the Eurozone economic calendar. Key stats on the day include German and Eurozone 2nd quarter GDP numbers. The Eurozone’s June industrial production figures will also provide direction. Finalized July inflation figures out of France will likely have a muted impact on the majors, however.

Ahead of the European open, July industrial production and fixed asset investments out of China set the tone.

Fixed asset investments rose by 5.7% in July, year-on-year, falling short of a forecast and June 5.8% rise. Of greater significance, however, were industrial production figures. Year-on-year, industrial production increased by 4.8%, down from 6.3% in June. Economists had forecast a 6.0% rise. Year-to-date, production was up by 5.8% to July, year-on-year, also falling short of a forecasted and June 6% rise.

With economic data out of the U.S limited to import and export price figures, focus late in the session will be on geopolitics.

In the futures markets, at the time of writing, the DAX was up by just 4 points, while the Dow Mini was down by just 31 points.

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