European Equities: German Economic Data and Sentiment Towards the FED to Influence

Economic Calendar

Tuesday, 27th July

France Jobseekers Total JUN

Wednesday, 28th July

German GfK Consumer Confidence AUG

Thursday, 29th July

German Unemployment Change/Rate JUL

German Inflation Rate MoM Prel JUL

Friday, 30th July

French GDP Growth Rate QoQ Prel Q2

French Household Consumption MoM JUN

German GDP Growth Rate Flash Q2

French Inflation Rate YoY Prel JUL

Spanish GDP Growth Rate Flash Q2

Italian GDP Growth Rate Adv Q2

Eurozone Core Inflation Rate Flash JUL

Eurozone GDP Growth Rate Flash Q2

Italian Inflation Rate MoM Prel JUL

Eurozone Inflation Rate Flash JUL

The Majors

It was a bearish day for the majors on Tuesday.

The CAC40 fell by 0.71%, with the DAX30 and the EuroStoxx600 ending the day down by 0.64% and by 0.54% respectively.

There were no major stats from the Eurozone to provide the majors with direction in the day.

Market sentiment towards the rout across the Chinese markets weighed on the majors going into the open.

Providing some support late in the day was the IMF’s latest economic growth forecasts. For 2022, the IMF revised up its growth forecasts by 0.5 percentage points to 5.6% for advanced economies.

Economic data from the U.S was also market positive. U.S consumer confidence took an unexpected jump in July, aligned with the IMF’s outlook towards the U.S economy.

The Stats

Economic data was limited to jobseeker numbers from France, which had a muted impact on the European majors.

In June, the total number of job seekers declined from 3,490.1k to 3,417.6k. Economists had forecast a decline to 3,430.1k.

From the U.S

Durable goods orders and consumer confidence figures were in focus late in the session.

In June, durable goods orders increased by 0.8%, following a 3.2% rise in May. Durable goods orders ex transportation increased by 0.3%, following a 0.5% rise in May. Economists had forecast increases of 1.9% and 0.9% respectively.

Consumer confidence strengthened in July, with the CB Consumer Confidence Index rising from 128.9 to 129.1. Economists had forecast a decline to 126.0.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Tuesday. BMW and Volkswagen slid by 1.73% and by 1.86% respectively, with Continental and Daimler falling by 1.54% and by 1.52% respectively.

It was also a bearish day for the banks. Deutsche Bank declined by 0.52%, with Commerzbank ending the day down by 2.70%.

From the CAC, it was a bearish day for the banks. Credit Agricole fell by 1.09%, with BNP Paribas and Soc Gen declining by 0.91% and by 0.98% respectively.

It was also a bearish day for the French auto sector. Stellantis NV and Renault ended the day with modest losses of 0.20% and 0.13% respectively.

Air France-KLM slipped by 0.07%, while Airbus SE rose by 0.29%.

On the VIX Index

It was a 2nd consecutive day in the green for the VIX on Tuesday.

Following a 2.21 gain on Monday, the VIX jumped by 10.13% to end the day at 19.36.

The NASDAQ fell by 1.21%, with the Dow and the S&P500 ending the day down by 0.24% and by 0.47% respectively.

VIX 280721 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the economic calendar. German consumer confidence will be in focus going into the European session.

Economists have forecast for the GfK Consumer Confidence Index to fall from -0.3 to -2.0 for August.

From the U.S, there are no material stats due out to provide the majors with direction. While there are no stats to consider, the markets will be looking ahead to the FED interest rate decision and press conference. The European majors will need to wait until Thursday’s session, however, to respond.

Away from the economic calendar, corporate earnings and COVID-19 news updates will also influence, however.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 87 points.

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