European Equities: German Business Sentiment in Focus Early in the Session

Economic Calendar

Wednesday, 25th August

German Ifo Business Climate Index (Aug)

Thursday, 26th August

GfK German Consumer Climate (Sep)

The Majors

It was a mixed day for the European majors on Tuesday.

The DAX30 rose by 0.33%, while the CAC40 and the EuroStoxx600 saw losses of 0.28% and 0.02% respectively.

Economic data was on the lighter side, with the German economy back in focus. Better than expected GDP numbers from Germany delivered the DAX with the support to buck the trend on the day.

For the broader market, FED uncertainty and concerns over the Delta variant continued to weigh, however.

The Stats

It was a quieter economic calendar through the European session, with German GDP numbers in focus.

In the 2nd quarter, the German economy grew by 1.6%, quarter-on-quarter, recovering from 1st quarter 1.8% contraction. Economists had forecast growth of 1.5%.

According to Destatis, the economy grew by 9.8%, year-on-year, versus a forecasted 9.6%. In the 1st quarter, the economy had contracted by 3.3%.

From the U.S

New home sales figures for July were in focus, which had a muted impact on the European majors.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Tuesday. BMW and Volkswagen led the way, with gains of 2.04% and 2.11% respectively. Continental and Daimler ended the day up by 1.71% and by 1.25% respectively.

It was also a bullish day for the banks. Deutsche Bank and Commerzbank rose by 1.28% and by 0.87% respectively.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.68% and by 0.69% respectively, with Soc Gen gaining by 0.59%.

It was also a relatively bullish day for the French auto sector. Stellantis NV and Renault saw modest gains of 0.26% and 0.90% respectively.

Air France-KLM surged by 5.58%, with Airbus SE rising by 1.56%.

On the VIX Index

It was back into the green for the VIX on Tuesday, ending a 2-day losing streak.

Following a 7.60% decline on Monday, the VIX rose by 0.41% to end the day at 17.22.

The NASDAQ rose by 0.52%, with the Dow and the S&P500 ending the day up by 0.09% and by 0.15% respectively.

VIX 250821 Daily Chart

The Day Ahead

It’s another relatively busy day ahead on the Eurozone’s economic calendar. The German economy is back in focus, with Business IFO Climate Index numbers in focus.

With business investment a key component of the economic recovery, the numbers will influence.

From the U.S, durable goods orders and core durable goods orders for July will also provide direction late in the day.

With the Jackson Hole Symposium just around the corner, however, we can expect some caution…

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 3 points.

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