European Equities: A Lack of Stats Leaves COVID-19 and Geopolitics in Focus

Economic Calendar:

Tuesday, 14th July

German CPI (MoM) (Jun) Final

Spanish CPI (YoY) (Jun) Final

Spanish HICP (YoY) (Jun) Final

German ZEW Current Conditions (Jul)

German ZEW Economic Sentiment (Jul)

Eurozone ZEW Economic Sentiment (Jul)

Eurozone Industrial Production (MoM) (May)

Wednesday, 15thJuly

Italian CPI (MoM) (Jun) Final

Thursday, 16th July

French CPI (MoM) (Jun) Final

French HICP (MoM) (Jun) Final

Eurozone Trade Balance (May)

Deposit Facility Rate (Jul)

ECB Interest Rate Decision (Jul)

ECB Press Conference

Friday, 17th July

Eurozone Core CPI (YoY) (Jun) Final

Eurozone CPI (MoM) (Jun) Final

Eurozone CPI (YoY) (Jun) Final

The Majors

A run of 3 consecutive days in the red came to an end on Friday. The DAX30 and CAC40 rose by 1.15% and by 1.01% respectively, with the EuroStoxx600 gaining 0.88%.

While market concerns over the rise in new COVID-19 cases across the U.S lingered, economic data delivered support on Friday.

Industrial production figures out of France and Italy delivered the majors with a boost. Earlier in the week, Germany’s industrial production figures had disappointed and weighed on the majors.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Friday. With no major stats out on the day, 2nd tier industrial production figures for France and Italy drew attention.

Month-on-month, industrial production surged by 42.1% in Italy in May, reversing a 20.5% slide from April with interest.

French industrial production jumped by 19.6%, reversing a 20.6% slide from April.

From the U.S

Economic data included wholesale inflation figures for June that had a muted impact on the European majors.

Earlier in the day, new loan figures out of China were also upbeat, reflecting China’s economic rebound. In June, new loans rose from CNY1,480bn to CNY1,810bn. The rise in loans was aligned with recent pickup in private sector activity in May and June.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Friday. Continental and Volkswagen rose by 1.83% and by 2.86% to lead the way. BMW and Daimler saw more modest gains of 1.26% and 1.06% respectively.

It was also a bullish day for the banks. Deutsche Bank rose by 3.35%, with Commerzbank rallying by 4.69%.

WIRECARD AG eked out a 1.62% gain following Thursday’s 9.19% slide.

From the CAC, it was a bullish day for the banks. Credit Agricole and Soc Gen rallied by 3.46% and 3.40% respectively with BNP Paribas gaining 3.29%.

The French auto sector fund much-needed support, with Peugeot and Renault gaining 2.37% and 3.77% respectively.

Air France-KLM and Airbus SE ended the day with gains of 1.26% and 3.53% respectively.

On the VIX Index

It was back into the red for the VIX on Friday. Reversing a 4.20% gain from Thursday, the VIX slid by 6.73% to end the day at 27.29.

While new COVID-19 cases continued to test market risk sentiment, news of progress towards a successful treatment delivered support.

The S&P500 and Dow rose by 1.05% and by 1.44% respectively, while the NASDAQ saw a more modest 0.66% gain.

VIX 13/07/20 Daily Chart

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 majors in the hands of geopolitics and COVID-19 news from the weekend. Hopes of progress towards a successful treatment drug supported the U.S majors on Friday In reality, however, a treatment drug would do little to slow the continued spread that may ultimately hit the U.S economy for a 2nd time…

As ever, however, the markets are likely to see the glass half full. Expect the Asian majors to give direction going into the European session.

From the U.S

It’s also a particularly quiet day on the economic calendar, with no material stats due out of the U.S later today.

The Latest Coronavirus Figures

On Sunday, the number of new coronavirus cases rose by 180,207 to 13,022,319. On Saturday, the number of new cases had risen by 237,217. The daily increase was lower than Saturday’s rise while higher than 156,610 new cases from the previous Sunday.

Germany, Italy, and Spain reported 372 new cases on Sunday, which was down from 412 new cases on Saturday. On the previous Sunday, 407 new cases had been reported.

From the U.S, the total number of cases rose by 55,683 to 3,411,329 on Sunday. On Saturday, the total number of cases had increased by 70,096. On Saturday, 4th July, a total of 107.457 new cases had been reported.

The Futures

In the futures markets, at the time of writing, the Dow was up by 150 points.

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