Friday, 19th July
- German PPI m/m(Jun)
It was back in the red for the majors. The DAX led the way down on Thursday, falling by 0.92% to pull the index into the red for the current week.
The CAC and EuroStoxx600 also saw red, with the pair falling by 0.38% and by 0.22% respectively.
Negative sentiment towards trade and corporate earnings results ultimately did the damage. The European markets had closed ahead of some dovish chatter from FOMC member Williams.
It was a quieter day on the economic calendar on Thursday, with no material stats out of the Eurozone on Friday.
The lack of stats left the European majors exposed to economic data and corporate earnings out of the U.S on the day.
On the data front, the Philly FED Manufacturing Index jumped from 0.30 to 21.80, with the employment sub-index rising from 15.40 to 30.00.
According to the latest Philly FED survey,
- 56% of firms reported an increase in demand versus 32% reporting a fall in demand.
- The current new orders index was also on the rise, increasing by 11 points, with the shipments index rising by 8 points in July.
- Futures indicators were skewed to the positive. Close to 53% of firms expected increases in activity over the next 12-months, well above 15% that expected a decline.
- Future capital spending improved by 9 points to 36.9, its highest reading in 17-months.
The numbers were not enough for the majors, however, which failed to move out of the red on the day.
The Market Movers
From the DAX, the usual suspects were back in the red. From the auto sector, Daimler was the worst-performing, sliding by 1.72%. Continental (-0.48%) and Volkswagen (-0.33%) were also amongst the bottom 10 stocks on the day. BMW saw a more modest 0.18% loss on the day. The sector struggled as the markets responded to reports of U.S – China trade talks being stuck on Huawei.
From the banking sector, Commerzbank tumbled by 2.24%, while Deutsche Bank ended the day flat.
From the CAC, BNP Paribas slipped by 0.41%, with Soc Gen ending the day down by 0.48%. Credit Agricole was amongst the worst performers on the day, falling by 1.6%. Renault also struggled, falling by 1.53% on Thursday.
The Day Ahead
Economic data due out of the Eurozone is limited to June wholesale inflation numbers out of Germany.
Barring an unexpected jump in inflation, the numbers are unlikely to have a material impact on the European majors.
With economic data out of the Eurozone on the lighter side, U.S consumer sentiment and expectation figures will likely influence later in the day.
There are no major earnings releases out of the U.S on the day to influence, which will leave the markets to consider the results from earlier in the week.
On the geopolitical front, any chatter from the U.S administration will also need to be considered on the day. Trade war chatter and Trump’s Friday Twitter sessions will also be a factor on the day.
Following mixed signaling from the FED on policy yesterday, we can also expect the majors to be sensitive to any chatter on monetary policy.
At the time of writing, the DAX was up by 74.5 points, while the Dow Mini was up by 124 points.