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European Equities: A Lack of Stats Leaves the EU Recovery Fund and COVID-19 in Focus

Economic Calendar:

 Thursday, 23rd July

GfK German Consumer Climate (Aug)

Eurozone Consumer Confidence Flash

Friday, 24th July

French Manufacturing PMI (Jul) Prelim

French Services PMI (Jul) Prelim

German Manufacturing PMI (Jul) Prelim

German Services PMI (Jul) Prelim

Eurozone Manufacturing PMI (Jul) Prelim

Eurozone Markit Composite PMI (Jul) Prelim

Eurozone Services PMI (Jul) Prelim

The Majors

It was a bullish start to the week for the European majors on Monday, with the DAX30 rising by 0.99% to lead the way. The CAC40 and EuroStoxx600 saw gains of 0.47% and 0.75% respectively.

There were no major stats out of the Eurozone or the U.S to distract the majors from EU Recovery Fund talks.

Talks extended from Friday and the weekend as member states failed to come to an agreement. There was a sense of optimism, however, that EU leaders would eventually find common ground that prevented a sell-off.

COVID-19 vaccine news delivered upside for the European majors on the day. News of further progress towards a vaccine hit the wires to support the majors.

The markets had struggled in the earlier part of the day as a result of the deadlock in Brussels.

The Stats

It was a quiet day on the Eurozone economic calendar. Key stats included Germany’s wholesale inflation figures for June.

Wholesale prices stalled in June, following a 0.4% fall in May. Economists had forecast a 0.2% rise.

The stats had a muted impact on the majors, however, as the markets remained focused elsewhere.

From the U.S

There were also no material stats to influence the majors on the day.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Continental rallied by 1.33% to lead the way, as support continued to kick in on expectations of better than expected earnings.

Daimler struggled on the day, falling by 1.45%. BMW and Volkswagen saw relatively modest losses of 0.49%, and 0.19% respectively.

It was also a mixed day for the banks. While Deutsche Bank rallied by 1.73%, Commerzbank ending the day down by 0.09%.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole rose by 0.09% and by 0.18% respectively. Soc Gen bucked the trend with a 0.04% loss.

The French auto sector had another mixed day. Peugeot fell by 0.41%, while Renault ended the day up by 1.70%.

Air France-KLM ended the day flat, while Airbus SE fell by 0.29% to mark a 3rd consecutive day in the red.

On the VIX Index

It was a second consecutive day in the red for the VIX, which fell by 4.75% on Monday. Following on from an 8.29% slide on Friday, the VIX ended the day at 24.46.

News updates on progress towards a COVID-19 vaccine delivered support on the day.

The S&P500 and Dow rose by 0.84% and 0.03% respectively, while the NASDAQ rallied by 2.51%.

VIX 21/07/20 Daily Chart

The Day Ahead

It’s another quiet day ahead on the Eurozone economic calendar. There are no material stats due out of the Eurozone to provide the majors with direction.

A lack of stats will leave the majors in the hands of updates from the EU Recovery Fund talks and COVID-19 news and updates.

From the U.S

It’s another particularly quiet day ahead, with no material stats due out of the U.S.

We can expect chatter from Capitol Hill and Beijing and COVID-19 news and updates to remain key drivers.

There are also corporate earnings to consider, though the markets seem to remain hellbent on optimism thanks to the FED.

The Latest Coronavirus Figures

On Monday, the number of new coronavirus cases rose by 182,589 to 14,850,887. On Sunday, the number of new cases had risen by 246,207. The daily increase was lower than Saturday’s rise and 199,164 new cases from the previous Monday.

Germany, Italy, and Spain reported 5,413 new cases on Monday, which was up from 491 new cases on Sunday. On the previous Monday, just 2,700 new cases had been reported.  Spain reported 4,581 new cases.

From the U.S, the total number of cases rose by 62,790 to 3,961,429 on Monday. On Sunday, the total number of cases had increased by 65,368. On Monday, 20th July, a total of 65,488 new cases had been reported.

The Futures

In the futures markets, at the time of writing, the DAX was up by 59.5 points, with the Dow up by 13 points.

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