Cac 40 positive.

European Equities: Eurozone and U.S Stats and COVID-19 Figures in the Spotlight

Economic Calendar: 

Wednesday, 1st July

German Retail Sales (MoM) (May)

Spanish Manufacturing PMI (Jun)

Italian Manufacturing PMI (Jun)

French Manufacturing PMI (Jun) Final

German Manufacturing PMI (Jun) Final

German Unemployment Change (Jun)

German Unemployment Rate (Jun)

Eurozone Manufacturing PMI (Jun) Final

Thursday, 2nd July

Eurozone Unemployment Rate (May)

Friday, 3rd July

Spanish Services PMI (Jun)

Italian Services PMI (Jun)

French Services PMI (Jun) Final

German Services PMI (Jun) Final

Eurozone Markit Composite PMI (Jun) Final

Eurozone Services PMI (Jun) Final

The Majors

It was a mixed day for the majors on Tuesday. The DAX30 and EuroStoxx600 rose by 0.64% and by 0.13%, while the CAC40 slipped by 0.19%.

Negative sentiment towards the upward trend in new COVID-19 cases continued to weigh on the majors on Tuesday.

There was support, however, as the EU readied to lift the nonessential travel ban on Wednesday. Positive manufacturing data out of China was also positive.

Later in the day, economic data from the Eurozone and the U.S also provided support. All in all, it was a positive end to the best quarter in 5-years.

The Stats

It was a busy day on the Eurozone economic calendar on Tuesday.

Key stats included French consumer figures for May and prelim June inflation figures for the Eurozone.

According to Insee, French consumer spending jumped by 36.6% in May, reversing a lockdown driven 20.2% slide in April.

From the Eurozone, inflationary pressures picked up, with the Eurozone’s annual rate of inflation rising from 0.1% to 0.2%.

According to Eurostat:

  • The annual rate of inflation picked up from 0.1% to 0.3% in June, according to prelim figures.
    • Food, alcohol, and tobacco prices rose by 3.1%, compared with 3.4% in May.
    • Prices for services increased by 1.2%, compared with 1.3% in May.
    • Non-energy industrial goods also contributed, with a 0.2% rise in prices, after a stable May.
    • Energy prices continued to drag. In June, prices fell by 9.4% following an 11.9% slide in May.
  • Month-on-month, consumer prices increased by 0.3%, reversing a 0.1% decline in May.
  • The annual rate of core inflation softened from 0.9% to 0.8%, however.

Prelim inflation figures for Italy and France and finalized GDP numbers for Spain had a muted impact on the majors.

From the U.S

It was a relatively busy day, with economic data including June’s consumer confidence and Chicago PMI numbers.

The CB Consumer Confidence Index jumped from 85.9 to 98.1 in June, supporting a positive outlook on consumption.

An improvement in consumer confidence was enough to offset the disappointing Chicago PMI number for June. The PMI increased from 32.3 to 36.6, falling well short of a forecasted 45.0.

The Market Movers

For the DAX: It was another bullish day for the auto sector on Tuesday. Daimler and Volkswagen led the way, with gains of 1.16% and 0.59% respectively. BMW and Continental rose by 0.37% and by 0.21% respectively.

It was a mixed day for the banks, however, with Deutsche Bank rising by 1.0%, while Commerzbank ended the day flat.

WIRECARD AG grabbed the headlines once more, surging by 96.38%.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole rose by 0.06% and by 0.50% respectively, while Soc Gen fell by 0.76%.

The French auto sector found further support, with Peugeot and Renault ending the day up by 2.15% and 2.33% respectively.

Air France-KLM fell by 2.47%, however, while Airbus SE eked out a 0.27% gain.

On the VIX Index

It was a 2nd consecutive day in the red for the VIX, which fell by 4.25%. Following on from an 8.49% decline on Monday, the VIX ended the day at 30.43.

Positive economic data overshadowed the upward trend in COVID-19 cases on the day to deliver the best quarter since the 1980s.

On the day, the S&P500 rose by 1.54%, with the Dow and NASDAQ gaining 0.85% and 1.87% respectively.

VIX 01/07/20 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. June manufacturing PMIs are due out of Italy and Spain, with unemployment and retail sales figures due out of Germany.

Finalized manufacturing PMIs are also due out of France, Germany, and the Eurozone.

We would expect Italy and the Eurozone’s Manufacturing PMIs and Germany’s stats to be the key drivers.

From the U.S

It’s a relatively busy day ahead. June’s ADP Employment Change figures are due out along with the market’s preferred ISM Manufacturing PMI.

The finalized Markit Manufacturing PMI is also due out though it will likely have a muted impact on the day.

For the markets, there will need to be a rebound in hiring to reverse May’s 2.76m slide in employment and a rise in the PMI…

Away from the numbers, expect COVID-19 and geopolitics to continue to be an area of focus and influence.

The Latest Coronavirus Figures

On Tuesday, the number of new coronavirus cases rose by 201,507 to 10,583,878. On Monday, the number of new cases had risen by 153,341. The daily increase was higher than Monday’s rise and up from 158,646 new cases from the previous Tuesday.

Germany, Italy, and Spain reported 934 new cases on Tuesday, which was up from 803 new cases on Monday. On the previous Tuesday, 952 new cases had been reported.

From the U.S, the total number of cases rose by 53.471 to 2,727,853 on Tuesday. On Monday, the total number of cases had risen by 41,940. On Tuesday, 23rd June, a total of 34,399 new cases had been reported.

The Futures

In the futures markets, at the time of writing, the DAX was up by 17 points, while the Dow was down by 104 points.

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