Growing Euro notes arrows over the flag of European Union.

European Equities: Economic Data and the ECB in the Spotlight…

Economic Calendar

Thursday, 22nd July

Eurozone Business Confidence

ECB Interest Rate Decision

ECB Press Conference

Eurozone Consumer Confidence Flash

Friday, 23rd July

French Markit Manufacturing PMI Flash

French Markit Services PMI Flash

German Markit Services PMI Flash

German Markit Manufacturing PMI Flash

Eurozone Markit Services PMI Flash

Eurozone Markit Manufacturing PMI Flash

The Majors

It was particularly bullish day for the majors on Wednesday, following Tuesday’s more modest gains.

The CAC40 rallied by 1.85%, with the DAX30 and the EuroStoxx600 ending the day up by 1.36% and by 1.65% respectively.

A shift in focus towards corporate earnings provided support, with the upside coming in spite of continued concerns over the Delta variant.

Market expectation of strong earnings and also a dovish ECB was the key combination for the majors mid-week.

There were no major stats to materially dent the recovery from Monday’s losses.

Following Wednesday’s rally, the CAC40 moved into positive territory for the current week, while the DAX30 and the EuroStoxx600 remained in the red.

The Stats

It’s been a quiet start to the week on the economic calendar. Following a wholesale inflation figures from Germany on Tuesday, industrial sales figures from Italy were in focus.

Industrial Sales

In May, industrial sales decreased by 1.0%, partially reversing a 3.3% jump from April. Year-on-year, production was up by 40.2% versus a forecasted 45% increase. In April, production had been up by 105.1%.

According to iStat.it,

  • Industrial turnover fell by 1.9% in the domestic market, while rising by 0.7% in the non-domestic one.
  • The manufacturing sector saw industrial turnover contract by 1.4%.
  • In the 3-months to May 2021, total industrial production turnover levels increased by 4.7% when compared with the previous 3-month period.
  • Turnover rose by 5.4% in the domestic market and by 3.2% in the non-domestic market.
  • Year-on-year, turnover in the domestic market was up 41.0% and up by 38.6% in the non-domestic one.

From the U.S

There were no major stats to provide the majors with direction later in the European session.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Wednesday. Volkswagen and Continental rallied by 2.43% and by 2.86% respectively. BMW and Daimler saw more modest gains of 1.08% and by 0.68% respectively.

It was a particularly bullish day for the banks. Deutsche Bank and Commerzbank ended the day up by 4.33% and by 2.65% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas rose by 3.15%, with Soc Gen and Credit Agricole rallying by 3.29% and 3.21% respectively.

It was also a bullish day for the French auto sector. Stellantis NV and Renault ended the day up by 3.43% and by 4.46% respectively.

Air France-KLM rose by 2.92%, with Airbus SE rallying by 4.38%.

On the VIX Index

It was a 2nd consecutive day in the red for the VIX on Wednesday.

Following a 12.31% slide on Tuesday, the VIX fell by 9.22% to end the day at 17.91.

The NASDAQ rose by 0.92%, with the Dow and the S&P500 ending the day up by 0.83% and by 0.82% respectively.

VIX 220721 Daily Chart

The Day Ahead

It’s a busy day ahead on the economic calendar.

Early in the European session, business confidence figures for the Eurozone will be in focus. While we expect the numbers to provide direction, the markets will be looking ahead to the ECB policy decision and press conference.

The ECB’s economic outlook and forward guidance on policy will be key. Following the ECB’s revision to its price stability objective, we can also expect plenty of Q&A on the new 2% objective.

After the ECB press conference, consumer confidence figures for the Eurozone will also influence.

From the U.S, jobless claims figures will also draw interest late in the European session. Market reaction may be delayed, however, with the release of the stats coinciding with the ECB press conference.

Away from the economic calendar, corporate earnings and COVID-19 news will also draw attention.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 18 points.

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