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European Equities: German Trade Data, the ECB Minutes, and U.S Jobless Claims in Focus

Economic Calendar

Thursday, 8th July

German Trade Balance (May)

ECB Monetary Policy Meeting Minutes

The Majors

It was a bullish day for the European majors on Wednesday.

The DAX30 rallied by 1.17%, with the CAC40 and the EuroStoxx600 seeing gains of 0.31% and by 0.78% respectively.

Disappointing economic data from Germany and apprehension ahead of the FOMC meeting minutes failed to spook bargain hunters following Tuesday’s pullback.

Optimism and market expectation of continued central bank support remains key for the European markets near-term.

The Stats

It was relatively quiet start to the European session. German industrial production figures were in focus.

German Industrial Production

In May, industrial production fell by 0.3%, following a 0.3% decline in April. Economists had forecast a 0.7% rise.

According to Destatis,

  • Production in industry excluding energy and construction was down by 0.5%.
  • Within industry, the production of consumer goods rose by 4.1%, while the production of intermediate goods increased by 0.6%.
  • The production of capital goods fell by 3.4%.
  • Outside of industry, energy production fell by 2.1%, while production in construction rose by 1.3%.
  • Compared with May 2020, production was up 17.3%, while down by 5.0% when compared with February 2020.

From the U.S

It was also a quieter day on the U.S economic calendar. On the economic data front, JOLT’s job openings had little influence. In May, job openings increased from 9.193m to 9.209m, coming in ahead of a forcasted 9.100m rise.

After the European close, the FOMC meeting minutes were key, however, and may provide some support going into the European open. In response to the FOMC meeting minutes, the U.S majors wrapped up the day in positive territory.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. BMW and Volkswagen rose by 0.05% and by 0.68% respectively. Continental and Daimler ended the day down by 0.25% and by 0.83% respectively.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank saw losses of 1.56% and 2.37% respectively.

From the CAC, it was a bearish day for the banks. Credit Agricole and Soc Gen slipped by 0.14% and by 0.84% respectively, with BNP Paribas falling by 1.43%.

It was also a bearish day for the French auto sector. Stellantis NV and Renault ended the day with losses of 0.43% and 1.33% respectively.

Air France-KLM and Airbus SE fell by 1.54% and by 0.96% respectively.

On the VIX Index

It was back into the red for the VIX on Wednesday, marking a 4th day in the red from 5-sessions.

Partially reversing a 9.09% gain from Tuesday, the VIX fell by 1.46% to end the day at 16.20.

The NASDAQ eked out a 0.1% gain, with the Dow and the S&P500 ending the day up 0.30% and by 0.34% respectively.

VIX 080721 Daily Chart

The Day Ahead

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

German trade data will be in focus ahead of the European open. Later in the day, the ECB’s monetary policy meeting minutes will also draw interest.

From the U.S, the weekly jobless claims will provide direction, though the release coincides with the ECB minutes.

Away from the economic calendar, COVID-19 news updates will need continued monitoring.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 16 points.

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