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European Equities: A Quiet Economic Calendar Leaves Central Bank Chatter and COVID in Focus

Economic Calendar

Tuesday, 29th June

Spanish HICP (YoY) (Jun) Prelim

Eurozone Economic Sentiment

German CPI (MoM) (Jun) Prelim

Wednesday, 30th June

French Consumer Spending (MoM) (May)

French CPI y/y (Jun) Prelim

German Unemployment Change (Jun)

German Unemployment Rate (Jun)

Italian CPI (MoM) (Jun) Prelim

Eurozone CPI (YoY) (Jun) Prelim

Eurozone Core CPI (YoY) (Jun) Prelim

Eurozone CPI (MoM) (Jun) Prelim

Thursday, 1st July

Spanish Manufacturing PMI (Jun)

Italian Manufacturing PMI (Jun)

French Manufacturing PMI (Jun) Final

German Manufacturing PMI (Jun) Final

Eurozone Manufacturing PMI (Jun) Final

Eurozone Unemployment Rate (May)

Friday, 2nd July

German Retail Sales (MoM) (May)

The Majors

It was a mixed end to the week for the European majors on Friday.

The CAC40 slipped by 0.12%, while the DAX30 and the EuroStoxx600 saw modest gains of 0.12% and 0.13% respectively.

Economic data from Germany provided support to the DAX30 and the EuroStoxx600, with consumer sentiment on the rise.

Following ECB President Lagarde’s outlook on the economy, a pickup in consumer sentiment was a must to be aligned. Early in the week, Lagarde had talked of a likely pickup in consumer spending to support a speedier economic recovery.

From the U.S, economic data was mixed, however, limiting the upside on the day.

The Stats

Economic data from the Eurozone was on the quieter side on Friday, with German consumer sentiment in focus.

The Gfk Consumer Climate increased from -6.9 to -0.3, which was the highest level since August 2020.

According to the June survey,

  • Both economic and income expectations saw marked increases.
  • Income expectations jumped by 14.6 points to 34.1, which was the highest level since a 41.2 in February 2020.
  • In June, the economic expectations indicator jumped by 17.3 points to 58.4 points, the highest level since 59 points in February 2011.
  • There was a modest rise in the propensity to buy indicator, however, which increased by 3.4 points to 13.4 points.

From the U.S

It was another busy day on the economic calendar.

Personal spending and the FED’s preferred inflation metrics were in focus later in the European session.

It was a mixed bag for the markets, however.

In May, personal spending stalled after a 0.9% rise in April.

On the inflation front, the numbers suggested that a further spike in prices may be avoided.

In May, the Core PCE Price Index rose by 0.5%, month-on-month, following a 0.7% increase in April. Economists had forecast a 0.6% rise.

Year-on-year, the Core PCE Price Index increased by 3.4%, which was in line with forecasts. In April, the Core PCE Price Index had risen by 3.1%.

Other stats included finalized consumer sentiment and expectation figures that had a muted impact on the majors.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Friday. Volkswagen and Daimler fell by 1.37% and by 1.33% to lead the way down. BMW and Continental saw modest losses of 0.38% and 0.53% respectively.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank ended the day with gains of 0.38% and 0.72% respectively.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole rose by 0.67% and by 0.57% respectively. Soc Gen bucked the trend, however, falling by 0.14%.

It was also a mixed day for the French auto sector. Stellantis NV rose by 0.41%, while Renault ended the day down by 0.30%.

Air France-KLM and Airbus SE ended the day with losses of 0.83% and 1.43% respectively.

On the VIX Index

It was a 5th consecutive day in the red for the VIX on Friday.

Following a 2.14% fall on Thursday, the VIX declined by 2.19% to end the day at 15.62.

The NASDAQ slipped by 0.06%, while the Dow and the S&P500 ended the day up by 0.69% and by 0.33% respectively.

VIX 280621 Daily Chart

The Day Ahead

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

From the U.S, there are also no material stats to provide the majors with direction later in the day.

A lack of economic data will leave the majors in the hands of central bank chatter and COVID-19 news updates from the weekend.

With the UK government struggling to contain the spread of the Delta strain, a pickup in new cases across the EU would question the optimistic economic outlook.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 22 points, while the DAX was down by 8 points.

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