Tuesday, 25th May 2021
German GDP (QoQ) (Q1) Final
German GDP (YoY) (Q1) Final
German Ifo Business Climate Index (May)
Thursday, 27th May 2021
GfK German Consumer Climate (Jun)
Friday, 28th May 2021
French Consumer Spending (MoM) (Apr)
French GDP (QoQ) (Q1) Final
French CPI m/m (May) Prelim
French HICP m/m (May) Prelim
It was a relatively bullish end to the week for the European majors on Friday.
The CAC40 and EuroStoxx600 rose by 0.68% and by 0.57% respectively, with the DAX30 ending the day up by 0.44%.
Economic data from the Eurozone and the U.S provided further support to the majors following Thursday’s rebound.
Adding to the upside on the day was further assurances from ECB President Lagarde of no shift to policy near-term. In spite of Lagarde’s assurances, the upside at the end of the week was modest. FOMC member talk of a review of the asset purchasing program, in spite of Powell’s assurances of no near-term tapering, left the markets on a cautious footing.
Economic data from the Eurozone was on the busier side on Friday with prelim private sector PMIs for May in focus.
According to prelim figures, the manufacturing PMI rose from 58.9 to 59.2, with the services PMI rising from 50.3 to 56.6.
Economists had forecast a manufacturing PMI of 58.5 and a services PMI of 53.0.
The manufacturing PMI fell from 66.2 to 64.0 while the services PMI increased from 49.9 to 52.8.
Economists had forecast a manufacturing PMI of 65.9 and a services PMI of 52.0.
In May, the manufacturing PMI slipped from 62.9 to 62.8, while the services PMI increased from 50.5 to a 35-month high 55.1. Economists had forecast PMIs of 62.5 and 52.3 respectively.
Supported by the pickup in service sector activity, the composite PMI increased from 53.8 to a 39-month high 56.9. Economists had forecast an increase to 55.1.
According to the Markit survey,
- The rate of expansion across the private sector hit the highest for over 3-years.
- New order inflows surged at a pace not seen for almost 15-years.
- Business optimism continued to hit new highs.
- Price gauges rose further, however, as demand continued to outstrip supply for many goods and services.
From the U.S
It was a relatively busy day on the economic calendar on Friday, with private sector PMIs for May also in focus.
The services PMI jumped from 64.7 to 70.1, with the manufacturing PMI rising from 60.5 to 61.5. Economists had forecast PMIs of 64.5 and 60.2 respectively.
The marked pickup in private sector activity mid-way through the 2nd quarter delivered support to the majors.
The Market Movers
For the DAX: It was a bullish day for the auto sector on Friday. Continental rallied by 2.31% to lead the way, with Daimler rising by 0.75%. BMW and Volkswagen ended the day with modest gains of 0.11% and 0.28% respectively.
It was also a bullish day for the banks. Deutsche Bank and Commerzbank rose by 2.79% and by 0.40% respectively.
From the CAC, it was a bullish day for the banks. Credit Agricole and Soc Gen ended the day up by 0.71%S and by 0.48% respectively. BNP Paribas eked out a 0.05% gain.
It was also a bullish day for the French auto sector. Stellantis NV rose by 2.07%, with Renault gaining 0.59%.
Air France-KLM avoided further losses, rising by 0.02%, with Airbus SE ended the day up by 1.45%.
On the VIX Index
It was a 2nd consecutive day in the red for the VIX on Friday.
Following a 6.81% fall from Thursday, the VIX declined by 2.52% to end the day at 20.15.
The Dow rose by 0.36%, while the NASDAQ and the S&P500 ended the day down by 0.48% and by 0.08% respectively.
The Day Ahead
It’s a particularly quiet day ahead on the European economic data front. There are no material stats due out of the Eurozone to provide the European majors with direction.
Trading volumes will also be on the lighter side, with Germany on holiday at the start of the week.
From the U.S, there are also no major stats for the markets to consider.
With little to distract the markets, expect any central bank chatter to influence. We can also expect concerns over inflation to remain a factor following last week’s private sector PMI numbers.
In the futures markets, at the time of writing, the Dow Mini up by 19 points.
For a look at all of today’s economic events, check out our economic calendar.