Thursday, 9th July
German Trade Balance (May)
It was another bearish for the European majors on Wednesday, with no stats or positive news to shift the mood from Tuesday. The CAC40 fell by 1.24%, with the DAX30 and EuroStoxx600 declining by 0.97% and 0.67% respectively.
Rising COVID-19 cases across the U.S drew more attention than normal, as the number of cases rose to beyond 3m.
Reuters also published an article reporting that the WHO acknowledged “evidence emerging” of the airborne spread of the virus.
The accelerating spread of the virus brings into question the market’s optimistic outlook on economic recovery. All of this before earnings season kicks in next week…
It was a particularly quiet day on the Eurozone economic calendar on Wednesday. There were no material stats to provide the European majors with direction.
From the U.S
It was also quiet through the U.S session, with no major stats from the U.S to shift sentiment late in the day.
The Market Movers
For the DAX: It was another mixed day for the auto sector on Wednesday. Continental slid by 2.54% to lead the way down. Daimler and Volkswagen saw more modest losses of 0.52% and 0.86% respectively, while BMW bucked the trend, with a 0.41% gain.
It was also another mixed day for the banks. Deutsche Bank rose by 0.89%, while Commerzbank slipped by 0.94%.
WIRECARD AG slid by 15.53% to partially reverse a 32.51% gain from Tuesday.
From the CAC, it was a bearish day for the banks. BNP Paribas and Soc Gen fell by 2.39% and 2.23% to lead the way down. Credit Agricole ended the day with a 1.42% loss.
The French auto sector struggled after a bullish start to the week. Peugeot and Renault slid by 4.20% and by 4.61% respectively.
Air France-KLM and Airbus SE fell by 2.21% and by 2.18% respectively, following on from a pullback on Tuesday.
On the VIX Index
A run of 2 consecutive days in the green came to an end for the VIX on Wednesday. Partially reversing a 5.33% gain from Tuesday, the VIX fell by 4.59% to end the day at 28.08.
After a bearish start to the day, the major U.S indexes bounced back to wrap up the day in positive territory.
Hope overshadowed the dire COVID-19 numbers from the U.S on the day, with no economic data to influence. Tech stocks led the way, delivering the NASDAQ with a solid gain on the day.
The S&P500 rose by 0.78%, with the Dow and NASDAQ ended the day with gains of 0.68% and 1.44% respectively.
The Day Ahead
It’s a relatively quiet day ahead on the Eurozone economic calendar. May’s trade figures for Germany are due out later this morning.
We won’t expect too much influence from the numbers, however, which are now dated.
With the stats unlikely to garner too much attention, expect updates on Brexit and COVID-19 news to remain key drivers.
From the U.S
It’s also a relatively quiet day on the economic calendar, though we do expect the weekly jobless claims to influence.
Following a record jump in nonfarm payrolls in June, we have yet to see the weekly claims fall back to sub-1m levels.
With a number of the most populous U.S states hitting pause on reopening, this week’s figures could be alarming…
Anything under 1m initial jobless claims and the markets may breathe a sigh of relief.
The Latest Coronavirus Figures
On Wednesday, the number of new coronavirus cases rose by 222,368 to 12,130,571. On Tuesday, the number of new cases had risen by 227,176. The daily increase was lower than Tuesday’s rise while higher than 210,499 new cases from the previous Wednesday.
Germany, Italy, and Spain reported 986 new cases on Wednesday, which was up from 776 new cases on Tuesday. On the previous Wednesday, 1,062 new cases had been reported.
From the U.S, the total number of cases rose by 62,416 to 3,162,416 on Wednesday. On Tuesday, the total number of cases had increased by 67,655. On Wednesday, 1st July, a total of 51,607 new cases had been reported.
In the futures markets, at the time of writing, the DAX was up by 127 points, while the Dow was down by 28 points.
For a look at all of today’s economic events, check out our economic calendar.