S&P 500

European Equities: A Quiet Economic Calendar Leaves COVID-19 and Geopolitics in Focus

Economic Calendar: 

Tuesday, 23rd June

French Manufacturing PMI (Jun) Prelim

French Services PMI (Jun) Prelim

German Manufacturing PMI (Jun) Prelim

German Services PMI (Jun) Prelim

Eurozone Manufacturing PMI (Jun) Prelim

Eurozone Markit Composite PMI (Jun) Prelim

Eurozone Services PMI (Jun) Prelim

Wednesday, 24th June

German IFO Business Climate Index (Jun)

Thursday, 25th June

GfK German Consumer Climate (Jul)

The Majors

It was back into the green for the European majors on Friday, delivering a 3rd day in the green for the week ending 19th June.

The EuroStoxx600 rose by 0.56% to lead the way, with the CAC40 and DAX30 gaining 0.42% and 0.40% respectively.

Market concerns over a spike in new COVID-19 cases failed to spook the markets at the end of the week.

Hopes of progress to ease tensions between the U.S and China provide support as central banks continued to print money…

At the end of the week, news hit the Bloomberg wires of China agreeing to increase its purchase of soybeans, corn, and ethanol.

While the news of China and the U.S was a positive, WIRECARD’s fall from grace limited appetite on the day.

The Stats

It was a quiet day on the Eurozone economic calendar on Friday. German wholesale inflation figures for May were in focus that had a muted impact on the majors.

Factories saw deflationary pressures ease in May as demand picked up from April’s historic slump.

Germany’s producer price index fell by 0.4%, following a 0.7% slide in April.

From the U.S

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

The Market Movers

For the DAX: It was bearish end to the week for the auto sector. Continental and Volkswagen fell by 1.57% and by 1.97% respectively to lead the way down. BMW and Daimler saw modest losses of 1.14% and .0.57% respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank saw losses of 0.19% and 1.83% respectively.

Deutsche Lufthansa ended a run of 2 consecutive days in the red with a 1.41% gain on Friday. On Thursday, Deutsche Lufthansa had fallen by 2.60%.

The story of the day once more, however, was WIRECARD AG, which slid by 33.06%. Missing funds and the resignation of the CEO at the end of the week led to another tumble.

From the CAC, it was a bearish day for the banks on Friday. Credit Agricole slid by 2.06% to lead the way down. BNP Paribas and. Soc Gen saw more modest losses of 1.44% and 1.68% respectively.

The French auto sector also struggled. Peugeot slid by 2.30%, with Renault falling by 1.88%.

Air France-KLM saw more red, falling by 0.33%, while Airbus SE partially recovered from a 1.98% loss with a 1.53% gain.

On the VIX Index

It was a 1st day in the green from 6, with the VIX having fallen for 5th consecutive days going into Friday. Rising by 6.62% on Friday, the VIX reversed a 1.58% fall from Thursday to end the day at 35.12.

It was a mixed day as the markets responded to rising new COVID-19 cases in recently opened U.S states and talk of further fiscal stimulus.

On the day, however, it was COVID-19 that had the greater sway, as concerns over a 2nd wave heightened.

The S&P500 and Dow fell by 0.56% and by 0.80% respectively, while the NASDAQ eked out a 0.03% gain.


VIX 22/06/20 Daily Chart

The Day Ahead

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

From the U.S, existing home sales figures for May are likely to have a muted impact.

Expect the latest COVID-19 numbers to influence along with chatter from Beijing and Washington.

In the early part of the day, the PBoC left loan prime rates unchanged, which was a market negative ahead of the European open.

The Latest Coronavirus Figures

On Sunday, the number of new coronavirus cases rose by 131,020 to 9,044,544. On Saturday, the number of new cases had risen by 155,790. The daily increase was lower than Saturday’s rise while up from 124,839 new cases from the previous Sunday.

Germany, Italy, and Spain reported 917 new cases on Sunday, which was down from 1,183 new cases on Saturday. On the previous Sunday, just 909 new cases had been reported.

From the U.S, the total number of cases rose by 26,079 to 2,356,657 on Sunday. On Saturday, the total number of cases had risen by 33,388. On Sunday, 14th June, a total of 19,920 new cases had been reported.

The Futures

In the futures markets, at the time of writing, the DAX was down by 149.5 points, while the Dow was up by 75 points.

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