Weltweiter Handel

European Equities: U.S China Trade Talks in Focus

Economic Calendar:

Monday, 29th July

  • Spanish HICP (YoY) (Jul) Prelim
  • Spanish CPI (YoY) (Jul) Prelim

Tuesday, 30th July

  • French GDP (QoQ) (Q2)
  • GfK German Consumer Climate (Aug)
  • French Consumer Spending (MoM) (Jun)
  • German CPI (MoM) (Jul) Prelim

Wednesday, 31st July

  • German Retail Sales MoM (Jun)
  • French CPI m/m (Jul) Prelim
  • French HICP m/m (Jul) Prelim
  • Spanish GDP (QoQ) (Q2)
  • German Unemployment Change (Jul)
  • German Unemployment Rate (Jul)
  • Italian CPI (MoM) (Jul) Prelim
  • Eurozone Core CPI (YoY) (Jul) Prelim
  • Eurozone CPI (YoY) (Jul) Prelim
  • Italian CPI (MoM) (Jul) Prelim
  • Eurozone GDP 2nd Estimate
  • Eurozone Unemployment Rate (Jun)

Thursday,1st August

  • Spanish Manufacturing PMI (Jul)
  • Italian Manufacturing PMI (Jul)
  • French Manufacturing PMI (Jul) Final
  • German Manufacturing PMI (Jul) Final
  • Eurozone Manufacturing PMI (Jul) Final

Friday, 2nd August

  • Eurozone Retail Sales (MoM) (Jun)

The Majors

The European majors ended the week on a high note on Friday. The CAC40 led the way on Friday, rising by 0.57%, closely followed by the DAX30, which rose by 0.47%. The EuroStoxx600 trailed the pair with a gain of just 0.31%.

For the week, the DAX30 led the way, gaining 1.3%. The CAC40 and EuroStoxx600 also made ground on the week, rising by 1.04% and by 0.90% respectively.

The Stats

It was a quiet day on the economic calendar, with no material stats out of the Eurozone at the end of the week

From the U.S, 2nd estimate, 2nd quarter GDP numbers came in ahead of market forecasts, providing support to the majors.

The U.S economy grew by 2.1% according to 2nd estimate figures, coming in ahead of a forecast 1.9% growth rate for the quarter. This was down from a 1st estimate 3.1%, however.

Outside of the stats, the European majors continued to find support from the Thursday’s ECB monetary policy decision. While the ECB held rates unchanged, the ECB policy statement revealed a willingness to ease monetary policy. Draghi’s less pessimistic view on the economy was also positive. While citing concerns over trade and manufacturing, Draghi expects consumption to continue to support the economy.

As far as the markets are concerned, an assurance that the ECB will make a move should economic conditions deteriorate was good enough.

The Market Movers

From the DAX, Volkswagen was amongst the top performers on the day, rising by 1.13%. It wasn’t all plane sailing for the auto sector, however, with Continental sliding by 0.98%. BMW and Daimler joined Volkswagen in the green, with gains of 0.17% and 0.28% respectively.

It was also a mixed bag for the banking sector. While Deutsche Bank ended the day flat on the day, Commerzbank fell by 0.66%.

From the CAC, it was also a mixed day for bank stocks. BNP Paribas and Credit Agricole fell by 0.13% and by 0.45% respectively. Soc Gen bucked the trend, rising by 0.39%. Renault found support, rising by 0.25% on Friday.

The Day Ahead

It’s a relatively quiet day on the economic calendar, with Spain’s prelim July inflation figures due out later this morning.

Barring an unexpected acceleration in the annual rate of inflation, the stats are unlikely to have a material impact on the majors.

With the stats on the lighter side, the markets will be looking for updates from the U.S – China trade talks that resumed this morning.

Sentiment towards monetary policy will also influence, with the BoJ, the FED and the BoE in action this week.

On the geopolitical front, Iran will also be in focus as tensions rise between Iran and the West.

At the time of writing, the DAX was down by 20 points, while the Dow Mini was down by 26 points.