Wednesday, 24th July
- German PPI m/m(Jun)
- French Manufacturing PMI (Jul) Prelim
- French Services PMI (Jul) Prelim
- German Manufacturing PMI (Jul) Prelim
- German Services PMI (Jul) Prelim
- Eurozone Manufacturing PMI (Jul) Prelim
- Eurozone Markit Composite PMI (Jul) Prelim
- Eurozone Services PMI (Jul) Prelim
Thursday, 25th July
- German IFO Business Expectations, Current Assessment, and Climate Indexes
- French Jobseekers Total
- ECB Monetary Policy Statement (Jul)
- ECB Press Conference
The European majors were on the move on Tuesday, with the DAX leading the way, rallying by 1.64%. The CAC40 and EuroStoxx600 also saw solid gains, with the pair rising by 0.92% and 0.98% respectively.
With a lack of economic data out of the Eurozone and economic data out of the U.S on the lighter side, corporate earnings provided direction on the day.
There was also support from expectations of an ECB rate cut on Thursday ahead of the FED’s anticipated rate cut next week.
On the geopolitical front, a Boris Johnson victory in the UK leadership race failed to dampen the mood. On the U.S – China trade front, news of face to face meetings scheduled for next week was also positive for the majors.
There were no material stats out the Eurozone for a second consecutive day, with U.S stats having a muted impact on the majors.
The Market Movers
From the DAX, the auto sector saw solid gains on Tuesday. Continental led the way, rallying by 9.39%. Daimler (+5.04%), BMW (+4.51%), and Volkswagen (+3.87%) were not far behind as the 4 auto stocks outperformed the rest of the DAX members.
Positive earnings results from UBS provided support to the banking sector. Deutsche Bank ended the day up by 2.87%, with Commerzbank up by 3.84%.
From the CAC, BNP Paribas gained 2.21%, with Soc Gen and Credit Agricole ended the day up by 3.13% and 1.94% respectively. Renault also had a solid day, rising by 2.53%.
The Day Ahead
It’s a busy day on the economic calendar, with France, Germany, and the Eurozone’s prelim July private sector PMIs due out.
We can expect the majors to be particularly sensitive to today’s figures. At a minimum, the rate of contraction in Germany’s manufacturing sector will need to slow. The Eurozone Composite PMI will also need to hold steady to provide support.
From the U.S, prelim July private sector PMI numbers will also be of influence on the day. Weak numbers would support the more dovish members of the FED ahead of next week’s interest rate decision.
On the earnings front, it’s a relatively busy day ahead. From the DAX, Daimler will deliver its earnings results for the quarter. From the U.S, Ford and Tesla will also influence the European auto sector.
At the time of writing, the DAX was up by 32.5 points, while the Dow Mini was up by 20 points.