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European Equities: Economic Data from China and Germany in Focus

Economic Calendar

Monday, 9th August

German Balance of Trade JUN

Tuesday, 10th August

ZEW German Economic Sentiment Index AUG

ZEW Eurozone Economic Sentiment Index AUG

Wednesday, 11th August

German Inflation Rate YoY Final JUL

Italian Inflation Rate YoY Final JUL

Thursday, 12th August

Eurozone Industrial Production YoY JUN

Eurozone Industrial Production MoM JUN

Friday, 13th August

France Inflation Rate YoY Final JUL

Eurozone Balance of Trade JUN

The Majors

It was yet another relatively bullish day for the European majors on Friday.

The CAC40 and the DAX30 rose by 0.53% and by 0.11% respectively, while the EuroStoxx600 ended the day flat.

Disappointing economic data from Germany failed to weigh on the majors, with the markets focused on NFP numbers from the U.S.

Better than expected labor market numbers from the U.S delivered the majors with support at the end of the week. While nonfarm payrolls may force the FED to shift on its current stance on policy, however, there’s unlikely to be any immediate talk of lifting rates.

The Stats

Economic data was on the lighter side on Friday, with industrial production figures from Germany in focus.

In June, industrial production fell by 1.3%, month-on-month, following on from a 0.8% decline in May. Economists had forecast a 0.5% rise in the month.

According to Destatis,

  • Production in industry excl. energy and construction was down 0.9%.
  • Within industry, the production of capital goods fell 2.9%, with the production of intermediate goods declining by 0.9%.
  • By contrast, the production of consumer goods jumped 3.4%.
  • Outside industry, energy production fell 0.6%, with production in construction declining 2.6%.
  • Compared with the same month a year earlier, production was up 5.1%.
  • When compared with February 2020, however, production was 6.8% lower.

From the U.S

It was a big day for the markets, with nonfarm payrolls for July in focus late in the European session.

In July, nonfarm payrolls increased by a further 943k following a 938k rise in June. As a result, the unemployment rate fell from 5.9% to 5.4%.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Friday. BMW rose by 1.08% to lead the way, with Daimler gaining 0.78%. Continental and Volkswagen ended the day with more modest gains of 0.38% and 0.51% respectively, however.

It was a bullish day for the banks, however. Deutsche Bank rose by 1.27%, with Commerzbank gaining 2.49%.

From the CAC, it was a bullish day for the banks. Credit Agricole and BNP Paribas rallied by 3.03% and by 2.92% respectively, with Soc Gen rising by 1.47%.

It also a bullish day for the French auto sector. Stellantis NV rallied by 2.47%, with Renault rising by 0.50%.

Air France-KLM bucked the trend, falling by 1.54%, while Airbus SE ended the day up by 0.22%.

On the VIX Index

It was a 4th consecutive day in the red for the VIX on Friday.

Following a 3.84% decline on Thursday, the VIX fell by 6.54% to end the day at 16.15.

The NASDAQ fell by 0.40%, while the Dow and the S&P500 ended the day up by 0.41% and by 0.17% respectively.

VIX 090821 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the economic calendar, with the Germany economy back in focus once more.

Key stats include trade data from German. With little else for the markets to consider through the European session, we can expect sensitivity to the numbers.

From the U.S, JOLTs job openings for June are due out late in the day. Following impressive nonfarm figures for June and July, however, the numbers are unlikely to have a material impact on the European majors.

Trade data from China, released over the weekend, and inflation figures from China later this morning will set the tone ahead of the open.

In July, China’s US Dollar trade surplus widened from $51.53bn to $56.58bn. Economists had forecast a widening to $52.00bn.

Exports increased by 19.3%, with imports up by 28.1%, year-on-year. Economists had forecast exports to rise by 31% and imports by 33%.

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