US Stock Futures Posting Small Gains in Attempt to Claw Back Weekly Losses

The major U.S. stock index futures contracts are trading higher in the premarket session on Friday as investors try to claw back some of this week’s losses after posting four straight days of decline.

At 06:46 GMT, the benchmark December E-mini S&P 500 Index is trading 4493.50, up 10.50 or +0.23%. The blue chip December E-mini Dow Jones Industrial Average is at 34871, up 118 or +0.34% and the technology-weighted December E-mini NASDAQ-100 Index is trading 15583.50, up 32.75 or +0.21%.

Thursday Recap

U.S. stocks closed lower for the fourth consecutive day on Thursday, putting all three major cash market indexes in a position to close lower for the week.

The best performer in the benchmark S&P 500 Index during the holiday-shortened week has been the Consumer Discretionary Sector, up about a quarter of one percent. The other ten sectors are all lower. Industrial and real estate stocks are the biggest losers, with each sector down more than 2%.

US Economic News

The number of Americans filing new claims for jobless benefits fell to the lowest level in nearly 18 months last week, offering more evidence that job growth was being hindered by labor shortages rather than cooling demand for workers, Reuters reported.

The weekly unemployment claims report from the Labor Department on Thursday, the timeliest data on the economy’s health, also showed the number of people on state unemployment rolls plunging to levels last seen in mid-March 2020 when the economy was reeling from mandatory shutdowns of nonessential businesses to slow the first wave of COVID-19 cases.

Initial claims for state unemployment benefits dropped 35,000 to a seasonally adjusted 310,000 for the week-ended September 4, the lowest level since mid-March 2020. Economists polled by Reuters had forecast 335,000 applications for the latest week.

Unadjusted claims, which economists say offer a better read of the labor market, fell 8,005 to 284,287 last week.

Claims have dropped from a record 6.149 million in early April 2020. They are closing in on the upper end of the 200,000-250,000 range viewed as consistent with healthy labor market conditions.

Treasury Yields Fall after Weekly Jobless Claims Drop to COVID-Era Low

U.S. Treasury yields fell on Thursday as last week’s initial jobless claims dropped to a new COVID-Era low in the face of the highly contagious delta variant.

The yield on the benchmark 10-year Treasury note fell 4 basis points to 1.295%. The yield on the 30-year Treasury bond dropped 6 basis points to 1.888%.

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

China Announces Release of Crude from Strategic Reserve with Explicit Aim of Lowering Prices

Crude oil prices took an intraday hit on Thursday after China surprised traders with a first-time intervention in the global market, announcing the release of crude from its strategic reserve with the explicit purpose of lowering prices.

The announcement came shortly after the country reported a jump in factory-gate inflation on Thursday. Surging energy costs in China are becoming a political headache for government officials, which likely prompted the unprecedented move. High oil prices are not the only concern, coal and natural gas prices are also rising, leading to electricity shortages in some provinces that have forced some factories to cut production.

International-benchmark Brent crude plunged as much as $1.36 a barrel to $71.24 in London, erasing earlier gains. U.S.-benchmark West Texas Intermediate had a similar reversal to the downside.

China’s Factory Inflation Hits 13-Year High as Materials Costs Soar

China’s factory gate inflation hit a 13-year high in August driven by roaring raw materials prices despite Beijing’s attempts to cool them, putting more pressure on manufacturers in the world’s second-largest economy, Reuters reported.

The producer price index (PPI) rose 9.5% from a year earlier in August, the National Bureau of Statistics (NBS) said on Thursday, faster than the 9.0% increase tipped in a Reuters poll and the 9.0% reported in July. That was the fastest pace since August 2008.

China’s economy has recovered strongly from last year’s coronavirus slump but has been losing steam recently due to domestic COVID-19 outbreaks, high raw material prices, tighter property curbs and a campaign to reduce carbon emissions, Reuters reported.

China to Auction Off State Oil Reserves to Help Refiners

China’s state reserves administration said on Thursday it would release crude oil reserves to the market via public auction to ease the pressure of high feedstock costs on domestic refiners, Reuters wrote.

The release will be made in phases and is mainly for integrated refining and chemical plants, the National Food and Strategic Reserves Administration said in a statement. That potentially rules out the participation of some smaller, independent refiners known as “teapots”.

The move will “better stabilize domestic market supply and demand and effectively guarantee the country’s energy security,” the administration added, without specifying the volume of crude it would sell or when.

No Long-Term Effect on Prices Expected

The move by China to offer relief from higher oil prices by releasing crude from its strategic reserve is a first-time event and may be the only time it makes such as move as Beijing, the world’s biggest crude oil importer, is famously secretive about its strategic petroleum reserve (SPR).

Prices may feel some short-term pressure, but the decision should have a limited effect over the long-run. Most energy experts expect to see limited further draws in China’s onshore crude inventories this year and a resumption of higher imports into year-end due to increased seasonal demand.

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

European Equities: A Light Economic Calendar to Test Support ahead of the U.S Open

Economic Calendar

Friday, 10th September

German CPI (MoM) (Aug) Final

The Majors

It was a mixed day for the European majors on Thursday.

The DAX30 and the CAC40 saw modest gains of 0.08% and 0.24% respectively, while the EuroStoxx600 slipped by 0.04%.

Economic data had a limited impact on the majors, in spite of positive numbers from Germany and the U.S.

The ECB’s monetary policy decision and press conference delivered much-needed support to the majors, however.

Through the early part of the sessions, concerns over a more hawkish shift on monetary policy had weighed on the majors.

Plans to modestly cut the pandemic’s emergency bond purchasing program was good enough to leave the majors relatively flat.

The Stats

German trade data was in focus going into the European open.

In July, Germany’s trade surplus widened from €13.6bn to €17.9bn. Economists had forecast a narrowing to €13.0bn

According to Destatis,

  • Exports were up 0.5% on the previous month and up by 12.4% on the same month a year earlier.
  • Imports were down 3.8% on the previous month, while up 16.6% on the same month a year earlier.

Trade with EU Countries:

  • Goods exports to EU member states rose by 17.7%, year-on-year, with imports up 18.7%.
  • To euro area countries, exports rose by 17.4%, with imports from euro area countries up 22.4%.
  • Exports to EU countries not belonging to the euro area increased by 18.4%, while imports were up by 11.0%.

Trade with non-EU Countries:

  • Exports to third countries increased by 6.8%, with imports from third countries up 14.2%.

Trade with the UK:

  • Compared with the same month last year, exports were up 7.2% to the UK. Imports from the UK increased by 15.6%.

Elsewhere:

Exports to China fell by 4.3%, year-on-year, while exports to the U.S were up 15.7%.

From the U.S

Jobless claim figures were in focus, though the stats had a muted impact, with the release coinciding with the ECB press conference.

In the week ending 3rd September, initial jobless claims fell from 345k to a post-pandemic low 310k. Economists had forecast a decline to 335k.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Volkswagen and BMW ended the day up by 0.84% and by 0.03% respectively. Daimler and Continental fell by 0.15% and by 0.55% respectively, however.

It was also a mixed day for the banks. Deutsche Bank rose by 0.14%, while Commerzbank slid by 2.10%.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.45% and by 0.17% respectively, with Soc Gen ending the day up by 0.57%.

It was a mixed day for the French auto sector, however. Stellantis NV rose by 0.40%, while Renault fell by 0.47%.

Air France-KLM joined airline stocks in the red, falling by 0.97%, while Airbus SE rose by 1.30%.

On the VIX Index

It was back into the green the VIX on Thursday.

Reversing a 0.99% fall from Wednesday, the VIX rose by 4.68% to end the day at 18.80.

On Thursday, the NASDAQ fell by 0.25%, with the Dow and S&P500 ending the day down by 0.43% and by 0.46% respectively.

VIX 100921 Daily Chart

The Day Ahead

It’s a quieter day ahead on the Eurozone’s economic calendar.

Finalized August inflation figures for Germany are due out going into the European open.

Barring a marked revision from prelim figures, however, the numbers should have a muted impact on the majors. On Thursday, the ECB stood by its transitory view on inflation. That should limit the impact of any marginal upward revision.

From the U.S, wholesale inflation figures will likely have a greater impact, however. A spike in wholesale inflation could give the FOMC hawks firmer footing for a near-term shift in policy, albeit a tapering to the asset purchasing program.

Following a pullback in the U.S markets on Thursday, concerns over the economic outlook will likely remain a factor with little on the economic calendar for the markets to consider.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 9 points.

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

German Trade Data Fails to Move the EUR as the Markets Await the ECB

It’s a been a quit start to the day on the Eurozone economic calendar.

German trade data was in focus going into the European open.

Trade

In July, Germany’s trade surplus widened from €13.6bn to €17.9bn. Economists had forecast a narrowing to €13.0bn

According to Destatis,

  • Exports were up 0.5% on the previous month and up by 12.4% on the same month a year earlier.
  • Imports were down 3.8% on the previous month, while up 16.6% on the same month a year earlier.

Trade with EU Countries:

  • Goods exports to EU member states rose by 17.7%, year-on-year, with imports up 18.7%.
  • To euro area countries, exports rose by 17.4%, with imports from euro area countries up 22.4%.
  • Exports to EU countries not belonging to the euro area increased by 18.4%, while imports were up by 11.0%.

Trade with non-EU Countries:

  • Exports to third countries increased by 6.8%, with imports from third countries up 14.2%.

Trade with the UK:

  • Compared with the same month last year, exports were up 7.2% to the UK. Imports from the UK increased by 15.6%.

Elsewhere:

  • Exports to China fell by 4.3%, year-on-year, while exports to the U.S were up 15.7%,

Market Impact

Ahead of today’s figures, the EUR had fallen to a pre-stat and current day low $1.18114 before finding support.

In response to today’s stats, the EUR fell to post-stat low $1.18121 before rising to a post-stat and current day high $1.18360.

At the time of writing, the EUR was up by 0.14% to $1.18322.

EURUSD 090921 Hourly Chart

Next Up

The ECB monetary policy decision and all-important Lagarde press conference. Will there be the talk of more than just tapering to spook the markets and drive the EUR northwards?

Initial jobless claim figures from the U.S are also due out but will likely play 2nd fiddle to the ECB…

European Equities: Economic Data and the ECB in Focus

Economic Calendar

Thursday, 9th September

German Trade Balance (Jul)

ECB Interest Rate Decision (Aug)

ECB Press Conference

Friday, 10th September

German CPI (MoM) (Aug) Final

The Majors

It was another bearish day for the European majors on Wednesday.

The DAX30 and the EuroStoxx600 fell by 1.47% and by 1.06% respectively, with the CAC40 ending the day down by 0.85%.

Economic data from the Eurozone was on the lighter side, leaving the negative sentiment from Tuesday to linger.

Concerns over the resilience of the economic recovery weighed on the majors ahead of today’s ECB monetary policy decision.

How the ECB responds to inflationary pressures, previously considered transitory, has also left the markets on unsteady ground.

According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August…

The Stats

French non-farm payrolls were in focus early in the session.

In the 2nd quarter, non-farm payrolls increased by 1.1% quarter-on-quarter. In the previous quarter, payrolls had risen by 1.2%.

From the U.S

JOLT’s job openings were in focus late in the European session.

In July, job openings jumped from 10.185m to 10.934m in July, coming in well ahead of a forecasted 10.000m.

The numbers failed to change the mood, however.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. Volkswagen slid by 3.05% to lead the way, with Daimler ending the day down by 2.44%. BMW and Continental both fell by 2.35% respectively.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank saw losses of 0.46% and 2.35% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole fell by 1.53% and by 1.29% respectively, with Soc Gen ending the day down by 2.11%.

Things were not much better for the French auto sector. Stellantis NV slid by 2.86%, with Renault falling by 0.82%.

Air France-KLM bucked the trend, rising by 0.64%, while Airbus SE fell by 0.33%.

On the VIX Index

It was back into the red the VIX on Wednesday.

Following a 10.54% jump on Tuesday, the VIX fell by 0.99% to end the day at 17.96.

On Tuesday, the NASDAQ declined by 0.57%, with the Dow and S&P500 ending the day down by 0.20% and by 0.13% respectively.

VIX 090921 Daily Chart

The Day Ahead

It’s a busier day ahead on the Eurozone’s economic calendar.

Trade data from Germany will draw interest in the early part of the session. While we can expect market sensitivity to the numbers, the ECB will be the main area of focus on the day.

Later in the day, the ECB will deliver its 1st policy decision of the final quarter of the year. While the markets are expecting tapering to the asset purchasing program, there is some uncertainty over other policy measures.

There’s been plenty of hawkish chatter amidst persistent inflationary pressure. Economic uncertainty remains as a result of the Delta variant, however.

From the U.S, jobless claims will also influence, though the release coincides with Lagarde’s press conference.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 12 points.

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

European Equities: A Quiet Economic Calendar Leaves the Majors in the Hands of the U.S Markets

Economic Calendar

Wednesday, 8th September

French Non-Farm Payrolls (QoQ) (Q2)

Thursday, 9th September

German Trade Balance (Jul)

ECB Interest Rate Decision (Aug)

ECB Press Conference

Friday, 10th September

German CPI (MoM) (Aug) Final

The Majors

It was a bearish day for the European majors on Tuesday.

The DAX30 and the EuroStoxx600 fell by 0.56% and by 0.45% respectively, with the CAC40 ending the day down by 0.26%.

Economic data for the Eurozone failed to give the majors a boost, in spite of upbeat GDP numbers. Better than expected industrial production figures from Germany were also not enough as economic sentiment took an unexpected tumble.

From China, trade data had provided some support ahead of the European open.

In August, China’s trade surplus widened from US$56.56bn to US$58.35bn versus a forecasted narrowing to US$51.05bn. Exports were up 25.6%, year-on-year, with imports up 33.1%. In July, exports had been up by 19.3% and imports up by 28.1%. Both sets of figures came in ahead of forecasts.

The Stats

German industrial production and Eurozone 2nd quarter GDP numbers were in focus. ZEW Economic Sentiment figures for Germany and the Eurozone also influenced, however.

Industrial Production

In July, industrial production rose by 1.0%, reversing a 1.0% fall from June. Economists had forecast a 0.9% increase.

According to Destatis,

  • Production in industry excl. energy and construction was up 1.3%.
  • Within industry, the production of capital goods increased 3.2%, with the production of consumer goods up 0.9%.
  • By contrast, the production of intermediate goods fell by 0.5%.
  • Outside industry, energy production was down 3.2%, while production in construction increased 1.1%.

The Eurozone Economy

In the 2nd quarter, the Eurozone economy grew by 2.2%, quarter-on-quarter, which was up from 2nd estimate 2.0%. The economy had contracted by 0.3% in the previous quarter.

Year-on-year, the economy grew by 14.3%, which was up from a 2nd estimate 13.6%. In the 1st quarter, the economy had contracted by 1.3%.

Economic Sentiment

In August, the Germany’s ZEW Economic Sentiment Index slid from 40.4 to 26.5, with the Eurozone’s falling from 42.7 to 31.1. The numbers were enough to weigh on the majors as the continued spread of the Delta variant added further uncertainty.

From the U.S

There were no stats to influence the majors later in the session.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. Volkswagen slid by 1.11% to buck the trend on the day. BMW and Continental both rose by 0.68% respectively, with Daimler ending the day up by 0.41%.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank saw gains of 0.74% and 3.44% respectively.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.39% and by 0.21% respectively, with Soc Gen ending the day up by 0.62%.

It was a bearish day for the French auto sector, however. Stellantis NV slid by 2.46%, with Renault down by 1.39%.

Air France-KLM slipped by 0.28%, with Airbus SE falling by 1.54%.

On the VIX Index

After having ended the day flat on Friday, the VIX rose by 10.54% on Tuesday to end the day at 18.14. The U.S markets were closed on Monday.

On Tuesday, the NASDAQ rose by 0.07%, while the Dow and S&P500 fell by 0.76% and by 0.34% respectively.

VIX 080921 Daily Chart

The Day Ahead

It’s a quieter day ahead on the Eurozone’s economic calendar.

French nonfarm payrolls are due out ahead of the European open. We don’t expect too much influence from the numbers, however.

With stats on the lighter side, expect the majors to take their cues from the U.S markets ahead of tomorrow’s ECB policy decision.

From the U.S, it’s another quiet day ahead on the economic calendar. JOLT’s job openings, due out late in the session, will draw some interest, however.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 2 points.

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

German Industrial Production Delivers Little EUR Comfort. GDP and Economic Sentiment Up Next

It’s a busy day on the Eurozone economic calendar today.

German industrial production was in focus ahead of Eurozone 2nd quarter GDP and ZEW Economic Sentiment figures for Germany and the Eurozone.

Industrial Production

In July, industrial production rose by 1.0%, reversing a 1.0% fall from June. Economists had forecast a 0.9% increase.

According to Destatis,

  • Production in industry excl. energy and construction was up 1.3%.
  • Within industry, the production of capital goods increased 3.2%, with the production of consumer goods up 0.9%.
  • By contrast, the production of intermediate goods fell by 0.5%.
  • Outside industry, energy production was down 3.2%, while production in construction increased 1.1%.

Market Impact

Ahead of today’s figures, the EUR had risen to a pre-stat and current high $1.18855 before falling to a pre-stat low $1.18708.

In response to today’s stats, the EUR rose to post-stat high $1.18825 before falling to a post-stat and current day low $1.18598.

At the time of writing, the EUR was down by 0.03% to $1.18670.

EURUSD 070921 Hourly Chart

Next Up

2nd quarter GDP numbers for the Eurozone and ZEW Economic Sentiment figures for Germany and the Eurozone.

European Equities: Economic Data for Germany and the Eurozone in Focus

Economic Calendar

Tuesday, 7th September

German Industrial Production (MoM) (Jul)

German ZEW Current Conditions (Sep)

German ZEW Economic Sentiment (Sep)

Eurozone GDP (QoQ) (Q2)

Eurozone GDP (YoY) (Q2)

Eurozone ZEW Economic Sentiment (Sep)

Wednesday, 8th September

French Non-Farm Payrolls (QoQ) (Q2)

Thursday, 9th September

German Trade Balance (Jul)

ECB Interest Rate Decision (Aug)

ECB Press Conference

Friday, 10th September

German CPI (MoM) (Aug) Final

The Majors

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

The DAX30 led the way, rising by 0.96%, with the the CAC40 and the EuroStoxx600 ending the day up by 0.80% and by 0.70% respectively.

With the U.S markets closed, the market focus was on economic data from the Eurozone at the start of the week. Economic data from Germany impressed, delivering support to the majors ahead of the ECB policy decision on Thursday.

Away from the economic calendar, rising COVID-19 cases continued to cause concern.

The Stats

German factory orders and construction PMI figures were in focus early in the European session.

In July, factory orders rose by 3.4%, month-on-month, versus a forecasted 1.00% decline. In June, orders had jumped by 4.6%.

According to Destatis,

  • Domestic orders fell by 2.5%, while foreign orders surged by 8.0% in July.
  • New orders from the euro area decreased 4.1%, while new orders from other countries jumped by 15.7% compared with June 2021.
  • Manufacturers of intermediate goods saw new orders slip 0.5%.
  • By contrast, new orders of capital goods rose by 5.4%, with capital goods orders up 7.5%.
  • Consumer goods orders also impressed, increasing by 7.5% in July.

In August, the HIS Markit Construction PMI fell from 47.1 to 44.6. The numbers had a muted impact on the European majors, however.

From the U.S

There were no stats to influence the majors later in the session, with the U.S markets closed for Labor Day.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Volkswagen and BMW rose by 0.25% and 0.80% respectively. Continental and Daimler ended the day down by 1.40% and by 0.03% respectively.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank saw gains of 2.13% and 1.87% respectively.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Soc Gen rose by 0.46% and by 0.40% respectively, with Credit Agricole ending the day up by 0.83%.

It was also a relatively bullish day for the French auto sector. Stellantis NV and Renault rose by 0.65% and by 0.15% respectively.

Air France-KLM ended the day down by 0.56%, while Airbus SE rallied by 1.22%.

On the VIX Index

The U.S markets were closed for Labor Day on Monday. On Friday, the VIX had ended the day flat after having risen by 1.86% on Thursday.

VIX 060921 Daily Chart

The Day Ahead

It’s a busier day ahead on the Eurozone’s economic calendar.

The German economy is back in focus, with industrial trend orders and ZEW Economic Sentiment figures due out.

For the Eurozone, 2nd quarter GDP and ZEW Economic Sentiment figures will also draw interest.

From the U.S, it’s another quiet day ahead on the economic calendar. There are no major stats to provide direction late in the European session.

Ahead of the European open, however, trade data from China set the tone.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 63 points.

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

European Equities: German Factory Orders in Focus

Economic Calendar

Monday, 6th September

German Factory Orders (MoM) (Jul)

Germany IHS Markit Construction PMI (Aug)

Tuesday, 7th September

German Industrial Production (MoM) (Jul)

German ZEW Current Conditions (Sep)

German ZEW Economic Sentiment (Sep)

Eurozone GDP (QoQ) (Q2)

Eurozone GDP (YoY) (Q2)

Eurozone ZEW Economic Sentiment (Sep)

Wednesday, 8th September

French Non-Farm Payrolls (QoQ) (Q2)

Thursday, 9th September

German Trade Balance (Jul)

ECB Interest Rate Decision (Aug)

ECB Press Conference

Friday, 10th September

German CPI (MoM) (Aug) Final

The Majors

It was a bearish day for the European majors on Friday.

The CAC40 slid by 1.08% to lead the way down, with the the DAX30 and the EuroStoxx600 ending the day down by 0.37% and by 0.56% respectively.

Disappointing economic data from China, the Eurozone, and the U.S weighed on the European majors on Friday.

From China, the Caixin Services PMI slid from 54.9 to 46.7 in August. The numbers followed manufacturing PMI figures from Wednesday, which had shown that the manufacturing sector had contracted in August.

Concerns over the impact of the Delta variant on the economic recovery were validated following the stats in the week.

The Stats

It was a particularly busy day on the Eurozone economic calendar ahead of key stats from the U.S late today.

Service sector PMI numbers for August were in focus along with Eurozone retail sales figures this morning. While the stats were of influence, the markets were holding out for August nonfarm payroll figures from the U.S, however, muting the impact of the numbers on the European majors.

Member State Services

For Spain, the services PMI fell from 61.9 to 60.1 versus a forecasted fall to 61.5.

Italy’s services sector PMI held steady at 58.8, however, versus a forecasted 58.5.

France’s services PMI fell from 56.8 to 56.3, which was down from a prelim 56.4

Numbers from Germany also failed to impress. In August, the PMI fell from 61.8 to 60.8 versus a prelim 61.5.

The Eurozone

In August, the Eurozone’s services PMI fell from 59.8 to 59.0, which was down from a prelim 59.7.

As a result, the Eurozone’s composite PMI fell from 60.2 to 59.0, which was down from a prelim 59.5.

According to the August composite survey,

  • Economic momentum only faded marginally from July’s 15-year peak.
  • Job growth was at the fastest rate seen in over 2-decades as firms look to respond to demand.
  • In August, Italy bucked the trend, registering the fastest output growth for over 15-years.
  • The Euro area saw a strong intake in new work in spite of easing from July levels.
  • Demand was strong, with new manufacturing sector orders leading the way.

Retail Sales

In July, Eurozone retail sales slid 2.3%, month-on-month, reversing a 1.5% increase from June.

From the U.S

Key stats included non-manufacturing PMI and nonfarm payroll figures, both of which were negative for riskier assets.

In August, the ISM Non-Manufacturing PMI fell from 64.1 to 61.7 versus a forecasted decline to 61.5.

Of greater influence, however, were the nonfarm payroll figures. In August, nonfarm payrolls rose by 235k, falling well short of a forecasted 750k. Nonfarm payrolls had jumped by 1,053k in July.

With the FED debate over tapering ongoing, the numbers may have caught a number of the hawks by surprise.

In spite of the weak headline number, unemployment fell from 5.4% to 5.2%, with average hourly wages up 4.3%, year-on-year.  Both beat forecasts.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Friday. Volkswagen and BMW fell by 0.30% and 0.28% respectively. Continental and Daimler ended the day down by 0.39% and by 0.55% respectively.

It was a mixed day for the banks, however. Deutsche Bank fell by 0.24%, while Commerzbank rose by 0.74%.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole slid 1.70% and by 1.93% respectively, with Soc Gen falling by 1.54%.

It was a mixed day for the French auto sector. While Stellantis NV rose by 0.04%, Renault fell by 1.84%.

Air France-KLM and Airbus SE ended the day down by 1.82% and by 1.97% respectively.

On the VIX Index

It was a flat end to the week for the VIX on Friday.

After having risen by 1.86% on Thursday, the VIX gave up gains from earlier in the day to end the day unchanged at 16.41.

The NASDAQ rose by 0.21%, while the Dow and the S&P500 ended the day down by 0.21% and by 0.03% respectively.

VIX 060921 Daily Chart

The Day Ahead

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

The German economy is in focus, with factory orders and construction PMI numbers due out.

Expect factory orders for July to have a greater impact.

From the U.S, there are no stats due out, with the U.S markets closed for Labor Day.

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

The Week Ahead – Monetary Policy Decisions Put the EUR, the Loonie, and the Aussie Dollar in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 38 stats in focus in the week ending 10th September. In the week prior, 80 stats had also been in focus.

For the Dollar:

It’s a quiet week ahead and a quiet start to the week, with the U.S markets closed for Labor Day on Monday.

On Tuesday, JOLT’s job openings will draw interest, with little else for the markets to consider.

The focus will then shift to the weekly jobless claim figures on Thursday.

Wholesale inflation numbers wrap things up at the end of the week.

In the week ending 3rd September, the Dollar Spot Index fell by 0.70% to 92.035.

For the EUR:

It’s a relatively busy week on the economic data front.

The German economy will be back in the spotlight in the week ahead.

German factory orders and industrial production figures will be in focus on Monday and Tuesday.

On Thursday, German trade data will also draw plenty of attention.

ZEW Economic Sentiment figures for Germany and the Eurozone will also influence on Tuesday.

The main event of the week, however, will be the ECB monetary policy decision.

With the markets expecting the ECB to stand pat on policy, the focus will be on the ECB Press Conference. Will the ECB continue to see reflation as transitory?

For the week, the EUR rose by 0.72% to $1.1880.

For the Pound:

It’s a busier week ahead on the economic calendar.

BRC Retail sales figures will be in focus early in the week. With the markets looking to see how the UK economy is faring, the numbers should have more influence than usual.

A lack of stats mid-week will leave the Pound in the hands of market risk sentiment ahead of a busy Friday.

Industrial and manufacturing production and trade data due out on Friday will be the key stats of the week.

The Pound ended the week up by 0.78% to $1.3871.

For the Loonie:

It’s a quiet week ahead on the economic calendar.

Ivey PMI numbers will be in focus on Wednesday ahead of employment figures on Friday.

While the employment numbers will be key, the BoC policy decision on Wednesday will be the main event.

BoC forward guidance will be the key area of focus on the day.

The Loonie ended the week up 0.76% to C$1.2524 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

There are no material stats to consider in the week.

While it’s a quiet week on the economic data front, the RBA is in action on Tuesday.

Have the latest lockdown measures left the RBA in a lengthier holding pattern on policy?

The Aussie Dollar ended the week up by 2.02% to $0.7460.

For the Kiwi Dollar:

It’s a quiet week ahead.

Electronic card retail sales figures on Friday will be the only key stat of the week.

From elsewhere, economic data from China will also influence, as will COVID-19 news updates.

The Kiwi Dollar ended the week up by 2.10% to $0.7158.

For the Japanese Yen:

Household spending will be in focus on Tuesday. On Wednesday, 2nd quarter GDP numbers will also draw interest. The markets will be looking for any revisions from the 1st estimates.

The Japanese Yen rose by 0.12% to ¥109.71 against the U.S Dollar.

Out of China

Trade data will have a material impact on market risk sentiment on Tuesday.

Private sector PMIs for July and August disappointed. Weak trade data will raise further question marks over the economic recovery.

With inflation still a hot topic, Inflation numbers on Thursday will also be key.

The Chinese Yuan ended the week up by 0.25% to CNY6.4560 against the U.S Dollar.

Geo-Politics

Iran, China, and Russia will continue to be the main areas of interest for the markets. News updates from the Middle East, in particular, will need monitoring following recent events in Afghanistan.

The Weekly Wrap – A Particularly Busy Economic Calendar Left the Greenback in the Red

The Stats

It was a particularly busy week on the economic calendar, in the week ending 3rd September.

A total of 80 stats were monitored, which was up from 49 stats in the week prior.

Of the 81 stats, 34 came in ahead forecasts, with 41 economic indicators coming up short of forecasts. There were 5 stats that were in line with forecasts in the week.

Looking at the numbers, 34 of the stats reflected an upward trend from previous figures. Of the remaining 46 stats, 41 reflected a deterioration from previous.

For the Greenback, FED monetary policy and economic data delivered Dollar weakness. In the week ending 3rd September, the Dollar Spot Index fell by 0.70% to 92.035. In the previous week, the Dollar had fallen by 0.88% to 92.653.

Out of the U.S

Early in the week, consumer confidence figures delivered yet more bad news. In August, the CB Consumer Confidence Index fell from 129.1 to 113.8, as the Delta variant continued to spread.

ADP nonfarm employment change figures on Wednesday also failed to impress. Nonfarm payrolls increased by 374k in August following a modest 326k rise in July.

On Thursday, jobless claim figures were somewhat better, with claims falling from 354k to 340k in the week ending 27th September.

At the end of the week, however, it was official nonfarm payroll figures that were key.

Falling well short of a forecasted 665k increase, payrolls rose by just 243k in August. In July, payrolls had jumped by 1,053k.

In spite of the weak number, the unemployment rate fell from 5.4% to 5.2% to further muddy the waters on FED policy.

From the private sector, the numbers were mixed. The ISM Manufacturing PMI rose from 59.5 to 59.9, while the all-important Non-Manufacturing PMI fell from 64.1 to 61.7.

Out of the UK

Economic data was on the lighter side once more. Finalized private sector PMIs for August disappointed in the week.

The all-important services PMI fell from 59.6 to 55.0, which was down from a prelim 55.5. Of less significance was a fall in the manufacturing PMI from 60.4 to 60.3, which was up from a prelim 60.1.

In the week, the Pound rose by 0.78% to end the week at $1.3871. In the week prior, the Pound had risen by 1.04% to $1.3764.

The FTSE100 ended the week down by 0.14%, partially reversing a 0.85% loss gain the previous week.

Out of the Eurozone

Private sector PMIs for August, French GDP, German unemployment, and prelim August inflation figures were in focus.

While inflationary pressures picked up once more in August, private sector PMIs delivered mixed results in the week.

According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August. The core annual rate of inflation picked up from 0.7% to 1.6%.

French GDP numbers for the 2nd quarter were also upbeat, with the French economy expanding by 1.1% in Q2.  In the previous quarter, the French economy had stagnated.

While Germany’s unemployment rate fell from 5.6% to 5.5% in July, retail sales slid by 5.1%, reversing a 4.5% increase from June. French consumer spending was also woeful, falling by 2.2%. In June, consumer spending had risen by just 0.3%.

Private sector PMIs were weaker but not weak enough to cause a stir.

The Eurozone’s composite PMI fell from 60.2 to 59.0, which was down from a prelim 59.5. In August, the Eurozone’s services PMI fell from 59.8 to 59.0, with the manufacturing PMI declining from 62.8 to 61.4.

For the week, the EUR rose by 0.83% to $1.1795. In the week prior, the EUR had fallen by 0.84% to $1.1698.

The CAC40 rose by 0.12%, while the DAX30 and the EuroStoxx600 ended the week with losses of 0.45% and 0.09% respectively.

For the Loonie

GDP and trade data were the key stats of the week.

In the 2nd quarter, the Canadian economy contracted by 0.3%, quarter-on-quarter. The economy had expanded by 0.3% in the previous quarter.

On an annualized basis, the economy contracted by 1.1% after having expanded by 5.5% in the quarter prior.

Trade figures were also weak, with the trade surplus narrowing from C$2.56bn to C$0.78bn.

While the stats were disappointing, crude oil prices held relatively steady following the previous week’s rebound, to deliver support.

In the week ending 3rd September, the Loonie rose by 0.76% to C$1.2524. In the week prior, the Loonie had rallied by 1.57% to C$1.2620.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

The Aussie Dollar rallied by 2.02% to $0.7460, with the Kiwi Dollar ending the week up by 2.10% to $0.7158.

For the Aussie Dollar

Company gross operating profits were upbeat for the 2nd quarter, surging by 7.1%. In the previous quarter, profits had fallen by 0.3%.

Private sector credit rose by 0.7% off the back of a 0.9% increase in June.

Also positive were GDP numbers for the 2nd quarter. Year-on-year, the economy grew by 9.6% compared with 1.1% in the previous quarter. Quarter-on-quarter, the economy expanded by 0.7% after having expanded by 1.8% in the quarter prior.

Trade data on Thursday were upbeat, with the trade surplus widening from A$10.496bn to A$12.117bn.

Retail sales figures were negative, however. In July, retail sales fell by 2.7%, which was in line with prelim figures. Lockdown measures weighed, with sales having fallen by 1.8% in June.

For the Kiwi Dollar

It was a relatively quiet week, with business confidence in focus.

In August, the ANZ Business Confidence Index slid from -3.8 to -14.2. While negative for the Kiwi, the markets were in forgiving mood, however. Expectations of a rebound in confidence limited the damage.

For the Japanese Yen

It was a relatively busy week, with the numbers skewed to the positive.

Retail sales rose by 2.4% in July, which followed a more modest 0.1% increase in June.

Capital spending was also on the rise. In the 2nd quarter, capital spending rose by 5.3%, year-on-year, partially reversing a 7.8% slide from the previous quarter.

Industrial production fell by a relatively modest 1.5%, however, partially reversing a 6.5% jump from June.

Service sector PMI numbers also disappointed in August, falling from 47.4 to 42.9.

The Japanese Yen rose by 0.12% to ¥109.71 against the U.S Dollar. In the week prior, the Yen had fallen by 0.05% to ¥109.84.

Out of China

Private sector PMIs were key stats in the week and were skewed to the negative.

Both the NBS and the Markit Caixin figures disappointed.

According to the NBS, the manufacturing PMI fell from 50.4 to 50.1, with the non-manufacturing PMI falling from 53.3 to 47.5.

Of greater significance, however, was a fall in the Caixin Manufacturing PMI from 50.3 to 49.2.

According to the Markit Caixin survey, things were not much better for the services sector. The Caixin Services PMI slid from 54.9 to 46.7 in August.

In the week ending 3rd September, the Chinese Yuan rose by 0.25% to CNY6.4560. In the week prior, the Yuan had ended the week up by 0.45% to CNY6.4720.

The CSI300 and the Hang Seng ended the week up by 0.33% and by 1.94% respectively.

European Equities: A Week in Review – 03/09/21

The Majors

It was a mixed week for the majors in the week ending 3rd September. Following modest gains from the week, prior, the DAX30 and the EuroStoxx600 fell by 0.45% and by 0.09% respectively. The CAC40 avoided the red, however, in spite of a 1.08% slide on Friday, with a modest 0.12% gain.

A particularly busy week on the economic calendar left the European majors on the defensive.

Weak data from China was of concern, with China’s private sector contracting in August, according the market’s preferred Markit survey.

Data from the U.S was also on the weaker side, adding to the negative mood as the Delta variant continued to impact.

The Stats

Private sector PMIs for August, French GDP, German unemployment, and prelim August inflation figures were in focus.

While inflationary pressures picked up once more in August, private sector PMIs delivered mixed results in the week.

According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 2.2% to 3.0% in August. The core annual rate of inflation picked up from 0.7% to 1.6%.

French GDP numbers for the 2nd quarter were also upbeat, with the French economy expanding by 1.1% in Q2.  In the previous quarter, the French economy had stagnated.

While Germany’s unemployment rate fell from 5.6% to 5.5% in July, retail sales slid by 5.1%, reversing a 4.5% increase from June. French consumer spending was also woeful, falling by 2.2%. In June, consumer spending had risen by just 0.3%.

Private sector PMIs were weaker but not weak enough to cause a stir.

The Eurozone’s composite PMI fell from 60.2 to 59.0, which was down from a prelim 59.5. In August, the Eurozone’s services PMI fell from 59.8 to 59.0, with the manufacturing PMI declining from 62.8 to 61.4.

From the U.S

Early in the week, consumer confidence figures delivered yet more bad news. In August, the CB Consumer Confidence Index fell from 129.1 to 113.8, as the Delta variant continued to spread.

ADP nonfarm employment change figures on Wednesday also failed to impress. Nonfarm payrolls increased by 374k in August following a modest 326k rise in July.

On Thursday, jobless claim figures were somewhat better, with claims falling from 354k to 340k in the week ending 27th September.

At the end of the week, however, it was official nonfarm payroll figures that were key.

Falling well short of a forecasted 665k increase, payrolls rose by just 243k in August. In July, payrolls had jumped by 1,053k.

In spite of the weak number, the unemployment rate fell from 5.4% to 5.2% to further muddy the waters on FED policy.

From the private sector, the numbers were mixed. The ISM Manufacturing PMI rose from 59.5 to 59.9, while the all-important Non-Manufacturing PMI fell from 64.1 to 61.7.

The Market Movers

From the DAX, it was a mixed week for the auto sector. BMW and Volkswagen saw gains of 1.43% and 0.90% respectively, while Continental and Daimler ended the week down by 3.16% and by 1.54% respectively.

It was a bullish week for the banking sector, however. Deutsche Bank rose by 0.38%, with Commerzbank rallying by 3.42%.

From the CAC, it was a mixed week for the banks. BNP Paribas and Credit Agricole rose by 0.77% and by 0.08% respectively, while Soc Gen slipped by 0.41%.

It was a bearish week for the French auto sector, however. Stellantis NV fell by 0.49%, with Renault sliding by 3.40%.

Air France-KLM and Airbus ended the week down by 2.68% and by 0.47% respectively.

On the VIX Index

It was a back into the green for the VIX in the week ending 3rd September, marking just the 3rd weekly gain in 7-weeks.

Following an 11.69% fall from the previous week, the VIX rose by a modest 0.12% to end the week at 16.41.

2-days in the green from 5 sessions, which included a 1.79% gain on Tuesday delivered the upside.

For the week, the NASDAQ rallied by 1.55%, with the S&P500 gaining 0.58%. The Dow fell by 0.24%, however.

VIX 040921 Weekly Chart

The Week Ahead

It’s another busy week ahead on the economic calendar, with the German economy in focus.

German factory orders and industrial production figures will be in focus on Monday and Tuesday.

On Thursday, German trade data will also draw plenty of attention.

ZEW Economic Sentiment figures for Germany and the Eurozone will also influence on Tuesday.

The main event of the week, however, will be the ECB monetary policy decision.

With the markets expecting the ECB to stand pat on policy, the focus will be on the ECB Press Conference. Will the ECB continue to see reflation as transitory?

From the U.S, it’s a quieter week, however, with JOLTs job openings and weekly jobless claims the key stats. At the end of the week, wholesale inflation figures will also draw interest, however.

Economic data from China will also provide direction following the weak PMI numbers from the week prior.

Inflation and trade data for July are due out in the week.

Economic Data from the Eurozone Fails to Move the EUR Dial. All Eyes are on U.S NFP Numbers

It was a particularly busy day on the Eurozone economic calendar ahead of key stats from the U.S late today.

Service sector PMI numbers for August were in focus along with Eurozone retail sales figures this morning. While the stats were of influence, the markets were holding out for August nonfarm payroll figures from the U.S, however, muting the impact of the numbers on the European majors.

Member State Services

For Spain, the services PMI fell from 61.9 to 60.1 versus a forecasted fall to 61.5.

Italy’s services sector PMI held steady at 58.8, however, versus a forecasted 58.5.

France’s services PMI fell from 56.8 to 56.3, which was down from a prelim 56.4

Numbers from Germany also failed to impress. In August, the PMI fell from 61.8 to 60.8 versus a prelim 61.5.

The Eurozone

In August, the Eurozone’s services PMI fell from 59.8 to 59.0, which was down from a prelim 59.7.

As a result, the Eurozone’s composite PMI fell from 60.2 to 59.0, which was down from a prelim 59.5.

According to the August composite survey,

  • Economic momentum only faded marginally from July’s 15-year peak.
  • Job growth was at the fastest rate seen in over 2-decades as firms look to respond to demand
  • In August, Italy bucked the trend, registering the fastest output growth for over 15-years.
  • The Euro area saw a strong intake in new work in spite of easing from July levels.
  • Demand was strong, with new manufacturing sector orders leading the way.

Retail Sales

In July, Eurozone retail sales slid 2.3%, month-on-month, reversing a 1.5% increase from June.

Market Impact

Ahead of today’s figures, the EUR had risen to a pre-stat and current high $1.18843 before falling back.

In response to today’s stats, the EUR rose to post-stat high $1.18828 before falling to a post-stat and current day low $1.18662.

At the time of writing, the EUR was up by 0.01% to $1.18759.

EURUSD 030921 Hourly Chart

Next Up

U.S nonfarm payrolls and ISM Non-Manufacturing PMIs. While non-manufacturing data will influence, it will boil down to the NFPs…

European Equities: Service Sector PMIs and U.S NFP numbers in Focus

Economic Calendar

Friday, 3rd September

Spanish Services PMI (Aug)

Italian Services PMI (Aug)

French Services PMI (Aug) Final

German Services PMI (Aug) Final

Eurozone Markit Composite PMI (Aug) Final

Eurozone Services PMI (Aug) Final

Eurozone Retail Sales (MoM) (Jul)

The Majors

It was a relatively bullish day for the European majors on Thursday.

The EuroStoxx600 rose by 0.35%, with the CAC40 and the DAX40 ending the day up by 0.06% and by 0.10% respectively.

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

Economic data from the U.S did provide support late in the session, however.

While the stats were market friendly, the focus remained on today’s nonfarm payrolls and ISM Non-Manufacturing numbers from the U.S.

The Stats

It was a particularly quiet day on the Eurozone economic calendar. There were no major stats to provide the majors with direction.

From the U.S

Key stats included weekly jobless claims and factory orders.

In the week ending 30th August, initial jobless claims fell from 354k to 340k. Economists had forecast a decline to 345k.

Factory orders rose by 0.40% in July following a 1.50% increase in June. Economists had forecast a 0.3% increase.

Other stats included nonfarm productivity and unit labor costs for the 2nd quarter, which had a muted impact on the majors.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Volkswagen and BMW saw gains of 0.77% and 0.01% respectively. Continental and Daimler ended the day down by 0.15% and by 0.75% respectively.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank rose by 0.24% and by 0.80% respectively.

From the CAC, it was a mixed day for the banks. BNP Paribas ended the day flat, with Soc Gen falling by 0.11%. Credit Agricole rose by 0.23%, however.

It was also a mixed day for the French auto sector. Stellantis NV rose by 1.19%, while Renault fell by 0.89%.

Air France-KLM rose by 0.35%, while Airbus SE ended the day down by 1.03%.

On the VIX Index

It was a back into the green for the VIX on Thursday.

Partially reversing a 2.25% fall from Wednesday, the VIX rose by 1.86% to end the day at 16.41.

The Dow rose by 0.37%, with the NASDAQ and the S&P500 ending the day up by 0.14% and by 0.28% respectively.

VIX 030921 Daily Chart

The Day Ahead

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

Service sector PMIs for Italy and Spain and retail sales figures for the Eurozone are due out later today. Finalized service and composite PMIs for France, Germany, and the Eurozone are also due out.

Barring marked revisions to prelim figures, Italy and the Eurozone’s PMIs and Eurozone retail sales figures will be key.

From the U.S, nonfarm payroll and ISM Non-Manufacturing PMI numbers for August are due out. Expect a plenty of influence from the numbers. While the FED has talked of tapering, a continued surge in hiring and a marked pickup in service sector activity could shift the FED’s timelines vis-à-vis interest rates.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 4 points.

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

European Equities: A Quiet Calendar Leaves U.S Jobless Claims in Focus

Economic Calendar

Friday, 3rd September

Spanish Services PMI (Aug)

Italian Services PMI (Aug)

French Services PMI (Aug) Final

German Services PMI (Aug) Final

Eurozone Markit Composite PMI (Aug) Final

Eurozone Services PMI (Aug) Final

Eurozone Retail Sales (MoM) (Jul)

The Majors

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

The DAX30 slipped by 0.07%, while the CAC40 and the EuroStoxx600 ended the day up by 1.18% and by 0.48% respectively.

Economic data from Germany weighed on the DAX30, while other member state and Eurozone manufacturing PMIs delivered support.

Disappointing manufacturing PMI numbers from China failed to sink the majors in spite of the a contraction in August. The all-important Caixin Manufacturing PMI fell from 50.3 to 49.2…

Stats from the U.S were market friendly, however, with weak ADP employment figures suggesting more time needed on the policy front.

The Stats

It was a busy day on the European economic calendar. German retail sales and manufacturing sector PMIs for Italy and Spain were in focus. Finalized PMIs from France, Germany, and the Eurozone also drew interest, however.

German Retail Sales

In July, retail sales slid by 5.1%, month-on-month, versus a forecasted 0.9% decline. Retail sales had rise by 4.5% in June.

Manufacturing Sector Activity

In August, Spain’s manufacturing PMI increased from 59.0 to 59.5 versus a forecasted decline to 58.9.

Italy’s manufacturing PMI rose from 60.3 to 60.9. Economists had forecasted a fall to 60.1.

From France, the manufacturing PMI fell from 58.0 to 57.5, which was up from a prelim 57.3.

German’s manufacturing PMI declined from 65.9 to 62.6, which was also down from a prelim 62.7.

As a result, the Eurozone’s manufacturing PMI fell from 62.8 to 61.4, which was down from a prelim 61.5.

From the U.S

Key stats included ISM Manufacturing PMI and ADP nonfarm employment change figures.

In August, the ISM Manufacturing PMI rose from 59.5 to 59.9. Economists had forecast a decline to 58.6. More significant for the markets was the employment sub-index, which fell from 52.9 to 49.0.

ADP numbers disappointed, however. For August, the ADP reported an 374k increase in nonfarm payrolls versus a forecasted 613k increase. In July, nonfarm employment had risen by 326k.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. Volkswagen bucked the trend, rising by 0.19%.  BMW and Continental ended the day down by 1.09% and by 1.81% respectively, with and Daimler  falling by 0.11%.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank rose by 0.57% and by 1.07% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen saw gains of 1.99% and 1.35% respectively, with Credit Agricole rising by 0.97%.

It was a bearish day for the French auto sector, however. Stellantis NV and Renault fell by 0.54% and 1.59% respectively.

Air France-KLM and Airbus SE ended the day up by 1.09% and by 1.99% respectively.

On the VIX Index

It was a back into the red for the VIX on Wednesday.

Reversing a 1.79% gain from Tuesday, the VIX fell by 2.25% to end the day at 16.11.

The Dow fell by 0.14%, while the NASDAQ and the S&P500 ended the day up by 0.33% and by 0.03% respectively.

VIX 020921 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the Eurozone’s economic calendar.

There are no material stats due out of the Eurozone to provide the majors with direction. The lack of stats will leave the focus on the U.S economic calendar.

As the markets look ahead to NFP numbers on Friday, today’s initial jobless claims will draw plenty of interest. We’ve yet to see initial jobless claims fall to sub-300k levels. A marked decline would place greater expectation on Friday’s NFP numbers. ADP numbers from Wednesday have added to the confusion, however…

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 5 points.

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

European Equities: A Busy Economic Calendar to Test the Majors

Economic Calendar

Wednesday, 1st September

German Retail Sales (MoM) (Jul)

Spanish Manufacturing PMI (Aug)

Italian Manufacturing PMI (Aug)

French Manufacturing PMI (Aug) Final

German Manufacturing PMI (Aug) Final

Eurozone Manufacturing PMI (Aug) Final

Eurozone Unemployment Rate (Jul)

Friday, 3rd September

Spanish Services PMI (Aug)

Italian Services PMI (Aug)

French Services PMI (Aug) Final

German Services PMI (Aug) Final

Eurozone Markit Composite PMI (Aug) Final

Eurozone Services PMI (Aug) Final

Eurozone Retail Sales (MoM) (Jul)

The Majors

It was a bearish day for the European majors on Tuesday.

The EuroStoxx600 fell by 0.38%, with the CAC40 and the DAX30 ending the day down by 0.11% and by 0.33% respectively.

Disappointing economic data from China failed to spoil the mood as dovish FOMC member chatter drove demand for riskier assets.

In August, China’s NBS Manufacturing PMI slipped from 50.4 to 50.1. More significantly was a slide in the Non-Manufacturing PMI from 53.3 to 47.5.

From the U.S, consumer confidence figures also influenced late in the session, while economic data from the Eurozone drew plenty of attention early in the session.

The Stats

French GDP and consumer spending figures, along with German unemployment numbers were in focus early in the day.

French Economy

In the 2nd quarter, the French economy expanded by 1.1%, quarter-on-quarter, after having stalled in the previous quarter. Economists had forecast growth of 0.9%

Consumer spending disappointed, however, with spending falling by 2.2% in July to reverse a 0.3% rise from June. Economists had forecast a 0.5% decline.

German Economy

Unemployment fell by 53k in August, following a 90k slide from July. Economists had forecast a 40k decline.

As a result, the unemployment rate fell from a revised 5.6% to 5.5%. Economists had forecast for the unemployment rate to hold steady at the revised 5.6%.

Inflation

French, Italian, and the all-important Eurozone inflation figures were also in focus and key for the markets.

French consumer prices rose by 0.6% in August, according to prelim figures, following a 0.1% increase in July.

France’s annual rate of inflation accelerated from 1.2% to 1.9%. Economists had forecast an annual rate of inflation of 1.6%.

Italy also saw inflationary pressures build, with the annual rate of inflation picking up from 1.9% to 2.1%.

Of greater significance, however, were Eurozone inflation figures.

According to prelim figures, the Eurozone’s annual rate of inflation picked up from 2.2% to 3.0% versus a forecasted 2.7%.

The core annual rate of inflation accelerated from 0.7% to 1.6%. Economists had forecast a core annual rate of inflation of 1.4%.

According to Eurostat,

  • Energy is expected to have the highest annual rate in August (15.4% compared with 14.3% in July).
  • Non-energy industrial goods saw the annual rate pick up from 0.7% to 2.7%.
  • There were also contributions from food, alcohol, & tobacco (2.0% compared with 1.6% in July) and services (1.1% compared with 0.9% in July).

From the U.S

Key stats included August’s Chicago PMI and, more importantly, consumer confidence figures for August.

Chicago’s PMI fell from 73.4 to 66.8 in August. Economists had forecast a decline to 68.0.

In August, the CB Consumer Confidence Index fell from 129.1 to 113.8 versus a forecasted 124.0.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. BMW bucked the trend, rallying by 1.57%, while Continental fell by 1.38%. Daimler and Volkswagen ended the day down by 0.73% and by 0.34% respectively.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank rose by 0.38% and by 1.09% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole rose by 1.38% and by 1.01% respectively, with Soc Gen gaining by 1.50%.

It was a mixed day for the French auto sector. Stellantis NV fell by 0.38%, while Renault rose by 1.35%.

Air France-KLM fell by 0.80%, while Airbus SE ended the day up by 0.73%.

On the VIX Index

It was back into the green for the VIX on Tuesday, ending a 2-day losing streak.

Reversing a 1.22% fall from Monday, the VIX rose by 1.79% to end the day at 16.48.

The NASDAQ slipped by 0.04%, with the Dow and the S&P500 ending the day down by 0.11% and by 0.13% respectively.

VIX 010921 Daily Chart

The Day Ahead

It’s another busy day ahead on the Eurozone’s economic calendar.

Italian and Spanish manufacturing PMIs for August are due out. Finalized PMIs for France, Germany, and the Eurozone are also due out.

Barring any marked revisions from prelim numbers, expect Italy and the Eurozone’s PMIs to be key.

From Germany, retail sales figures for August will also draw interest ahead of the PMIs

From the U.S, ADP nonfarm employment change and ISM Manufacturing PMIs will also influence late in the session.

Ahead of the European open, expect China’s Caixin Manufacturing PMI for August to set the tone.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 52 points.

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

European Equities: A Month in Review – August 2021

The Majors

It was yet another bullish month for the European majors in August, logging a 7th consecutive monthly gain.

The DAX30 and the EuroStoxx600 rose by 1.87% and by 1.98% respectively, with the CAC40 trailing once more with a 1.02% gain.

It was another choppy month for the European majors, with economic data, FED monetary policy, and COVID-19 key areas of focus.

While economic data was mixed in the month, from the U.S and the Eurozone, the numbers were good enough to avoid a sell-off.

Market jitters over FED monetary policy tested support ahead of the Jackson Hole Symposium late in the month. FED Chair Powell’s assurances that tapering did not constitute tightening was good enough for the markets in August.

On the negative, however, was the continued spread of the Delta variant, which raised concerns over the economic recovery.

The Stats

Key stats in the month included inflation, consumer spending, consumer sentiment, private sector PMIs and 2nd quarter GDP numbers.

Private Sector PMIs

Private sector PMIs for August were better than expected easing concerns over a material slowdown in economic growth.

For the Eurozone, the Manufacturing PMI fell from 62.8 to 61.5, while the services PMI slipped from 59.8 to 59.7.

Both France and Germany saw slower growth across the manufacturing and the services sectors. For Germany, the manufacturing PMI slipped from 65.9 to 62.7. Avoiding a PMI of sub-60 was key.

2nd Quarter Growth

GDP numbers for France and Germany were in focus in the month, with the numbers beating expectations.

For Germany, the economy grew by 1.6% in the 2nd quarter versus a forecasted 1.5%. The economy had contracted by 1.8% in the quarter prior.

Quarter-on-quarter, the French economy expanded by 1.1%, coming in ahead of a forecasted 0.9%. In the previous quarter, the economy had stalled.

For the Eurozone, 2nd estimate GDP numbers were also market positive in spite of a modest downward revision from the 1st estimate. In the 2nd quarter, the Eurozone economy expanded by 2.0%, quarter-on-quarter, which was in line with prelim numbers.

Year-on-year, however, the economy expanded by 13.6%, revised down from a 1st estimate 13.7%. In the 1st quarter, the economy had contracted by 1.3%.

Inflation

With the ECB in action next week, inflation figures for August also drew plenty of attention. The markets were looking for any further pickup in inflationary pressure that could question the ECB’s transitory view.

For the Eurozone, the annual rate of inflation accelerated from 2.2% to 3.0%. The core annual rate of inflation picked up from 0.7% to 1.6%.

Business and Consumer Sentiment

For the markets, a deterioration in business and consumer sentiment was palatable, as a result of the Delta variant.

Germany and the Eurozone saw business and consumer confidence wane in the 3rd quarter.

From Germany, the GfK Consumer Climate Indicator fell from -0.3 to -1.2 in August. The all-important Ifo Business Climate Index declined from 100.7 to 99.4.

For the Eurozone, consumer confidence fell from -4.4 to-5.3 in August, with the business climate index falling from 1.88 to 1.75.

From the U.S

Economic data delivered mixed results once more.

Labor market numbers impressed, with nonfarm payrolls surging by a further 943k in July. In June, nonfarm payrolls had jumped by 938k.

Jobless claims failed to fall below the 300k mark in the month, however, in spite of the NFP numbers.

Private sector PMI numbers also impressed.

The all-important ISM Non-Manufacturing PMI rose from 60.1 to 64.1 in July, supporting the optimistic economic outlook.

Manufacturing sector saw slower growth, but only modestly, with the PMI falling from 60.6 to 59.6.

On the consumption front, retail sales figures were weak, with retail sales falling by 1.1% in July. In June, retail sales had risen by 0.7%.

The figures coincided with weaker consumer sentiment driven by the Delta variant.

In August, the Michigan Consumer Expectations Index fell from 79.0 to 70.3, with the expectations index sliding from 81.2 to 65.1.

The markets preferred CB Consumer Confidence also showed weakness. In August, the consumer confidence index fell from 129.1 to 113.8. Economists had forecast a more modest decline to 124.0.

On the inflation front, the annual rate of inflation softened from 4.5% to 4.3% in July, easing concerns over a further build up. The FED’s preferred Core PCE Price Index was up 3.6%, year-on-year, the rate of inflation unchanged from June. This was also a positive for riskier assets. From a market perspective, softer numbers are going to be needed near-term, however, to further support the FED’s transitory outlook.

The Market Movers

For the DAX: It was a bearish month for the auto sector in August. Daimler slid by 5.41%, with BMW and Volkswagen down by 4.30% and by 2.52% respectively. Continental ended the month with a more modest 0.87% loss.

It was also a bearish month for the banks. Deutsche Bank fell by 1.82%, with Commerzbank declining by 2.39%.

From the CAC, it was a bullish month for the banking sector. BNP Paribas and Credit Agricole rose by 4.43% and by 3.83% respectively. Soc Gen led the way, however, rallying by 7.76%.

It was a mixed month for the auto sector. Renault fell by 1.81%, while Stellantis NV ended the month up by 4.71%.

Air France-KLM avoided the red, rising by 0.66%, while Airbus SE ended the month flat.

On the VIX Index

It was a back into the red for the VIX in August, marking a 6th monthly decline in 7-months.

Partially reversing a 15.22% rise from July, the VIX fell by 9.65% to end the month at 16.48.

In August, the NASDAQ rallied by 4.00%, with the Dow and the S&P500 ending the month up by 1.22% and by 2.90% respectively.

VIX 010921 Monthly Chart

The Month Ahead

The usual data sets will need continued monitoring. With progress made on the vaccination front, however, the markets will be looking for a pickup in business and consumer confidence.

Inflation numbers will also need to soften to support the transitory view shared by both the ECB and the FOMC.

Following some mixed numbers from China of late, economic data will also need to resume an upward trend to ease any concerns over growth.

Away from the economic calendar, COVID-19 news will need monitoring. As new cases continued to rise in August, the threat of a vaccine resilient variant remains.

Economic Data from France Sends the EUR Mixed Signals ahead of Eurozone Inflation Numbers

It’s a busy day on the Eurozone economic calendar.

Early in the session, the French economy was in the spotlight, with inflation, GDP, and consumer spending in focus.

In the 2nd quarter, the French economy expanded by 1.1%, quarter-on-quarter, after having stalled in the previous quarter. Economists had forecast growth of 0.9%

Consumer spending disappointed, however, with spending falling by 2.2% in July, reversing a 0.3% rise from June. Economists had forecast a 0.5% decline.

French consumer prices rose by 0.6% in August, according to prelim figures, following a 0.1% increase in July.

France’s annual rate of inflation accelerated from 1.2% to 1.9%. Economists had forecast an annual rate of inflation of 1.6%.

Market Impact

Ahead of today’s figures, the EUR had fallen to a pre-stat and current day low $1.17936 before rising to a pre-stat high $1.18314.

In response to today’s stats, the EUR rose to post-stat and current day high $1.18316 before falling to a post-stat low $1.17262.

At the time of writing, the EUR was up by 0.26% to $1.18268.

EURUSD 310821 Hourly Chart

Next Up

German unemployment and prelim Italian and Eurozone inflation figures for August. Late in the session, U.S consumer confidence will also influence.

European Equities: Economic Data to Keep the Markets Busy Throughout the Day

Economic Calendar

Tuesday, 31st August

French Consumer Spending (MoM) (Jul)

French GDP (QoQ) (Q2)

German Unemployment Change (Aug)

German Unemployment Rate (Aug)

Italian CPI (MoM) (Aug) Prelim

Eurozone CPI (YoY) (Aug) Prelim

Wednesday, 1st September

German Retail Sales (MoM) (Jul)

Spanish Manufacturing PMI (Aug)

Italian Manufacturing PMI (Aug)

French Manufacturing PMI (Aug) Final

German Manufacturing PMI (Aug) Final

Eurozone Manufacturing PMI (Aug) Final

Eurozone Unemployment Rate (Jul)

Friday, 3rd September

Spanish Services PMI (Aug)

Italian Services PMI (Aug)

French Services PMI (Aug) Final

German Services PMI (Aug) Final

Eurozone Markit Composite PMI (Aug) Final

Eurozone Services PMI (Aug) Final

Eurozone Retail Sales (MoM) (Jul)

The Majors

It was a relatively bullish start to the week for the European majors on Monday.

The DAX30 rose by 0.22%, with the CAC40 and the EuroStoxx600 ending the day up by 0.08% and by 0.07% respectively.

Support for the majors continued to come from FED Chair Powell’s policy speech from Friday. Economic data from Germany also supported the ECB’s view that the inflationary build was likely to be transitory.

Concerns over the impact of the Delta variant lingered, however, though progress on the vaccination front remains a counter.

The Stats

German inflation figures were the key stats of the day.

In August, consumer prices stalled, month-on-month, after having risen by 0.9% in July. Economists had forecast a 0.1% increase.

Germany’s annual rate of inflation picked up from 3.8% to 3.9%, which fell short of a forecasted 4.9%.

From the U.S

Economic data was limited to pending home sales figures for July, which had a muted impact on the majors.

The Market Movers

For the DAX: It was a relatively bullish day for the auto sector on Monday. Continental and Daimler ended the day up by 0.54% and by 0.60% respectively. BMW and Volkswagen led the way, however, with gains of1.23% and 1.15% respectively.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 0.57% and by 0.34% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole fell by 0.86% and by 0.21% respectively, with Soc Gen sliding by 1.59%.

It was also a bearish day for the French auto sector. Stellantis NV and Renault saw losses of 0.85% and 0.47% respectively.

Air France-KLM fell by 1.49%, with Airbus SE ended the day down by 0.14%.

On the VIX Index

It was a 2nd consecutive day in the red for the VIX on Monday.

Following a 13.00% slide on Friday, the VIX fell by 1.22% to end the day at 16.19.

The Dow fell by 0.16%, while the NASDAQ and the S&P500 ended the day up by 0.90% and by 0.43% respectively.

VIX 310821 Daily Chart

The Day Ahead

It’s a particularly busy day ahead on the Eurozone’s economic calendar. French consumer spending and 2nd quarter GDP numbers will be in focus going into the European session.

While the GDP numbers will be of greater influence, an unexpected fall in spending would test support for the CAC40.

Later in the morning, German unemployment figures will also draw plenty of interest.

On the inflation front, prelim August inflation figures for Italy and the Eurozone are also due out. Inflation is a key area of focus for the markets, with any further pickup in Eurozone inflationary pressure likely to question the ECB’s policy timelines.

From the U.S, consumer confidence figures for August, due out late in the day, will also be key.

Ahead of the European open, expect private sector PMI numbers from China to set the tone.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 42 points.

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

US Stock Futures: Sideways-to-Lower as Major Players Move to Sidelines Ahead of Friday’s NFP Report

The major U.S. stock Indexes are trading flat-to-lower in Monday’s pre-market session as investors continued to assess the impact of Federal Reserve Chairman Jerome Powell’s speech on Friday, while preparing for the final trading days of August and next Friday’s U.S. Non-Farm Payrolls report.

At 0:34 GMT, September E-mini S&P 500 Index futures are trading 4503.75, up 1.75 or +0.04%. September E-mini Dow Jones Industrial Average futures are at 35376, down 27 or -0.08% and September E-mini NASDAQ-100 Index futures are trading 15431.00, up 4.50 or +0.03%.

The early price action suggests the relief rally fueled by Powell’s speech on Friday may be fizzling out with many investors already hunkering down ahead of Friday’s release of August job numbers that could influence Fed policy at its late September meeting. Economists polled by Dow Jones expect 750,000 jobs were created in August and the unemployment rate fell to 5.2%.

With only two days left in the month, investors are hoping to add to August’s modest gains. As of Friday’s close, the benchmark S&P 500 Index is up 2.6%. The blue chip Dow Jones Industrial Average and the NASDAQ Composite rose 1.5% and 3.1% this month, respectively.

Investors Hoping to Build on Powell’s Somewhat Dovish Comments

U.S. stocks rose on Friday after Fed Chair Powell signaled bond tapering could start later this year, but the central bank is in no rush to hike interest rates. The major stock indexes jumped on the news because many investors had anticipated an earlier tapering.

Powell said there had been clear progress toward maximum employment and he believed that if the U.S. economy improved as anticipated, “it could be appropriate to start reducing the pace of asset purchases this year.”

Powell’s speech showed the Chairman has not adopted the hawkish stance of some Fed officials. Based on statements from other Fed officials, a tapering announcement could come as soon as the Fed’s September 21-22 meeting. Powell said the central bank has “much ground to cover” to reach its other goal of maximum employment.

Oil Rises as Hurricane Ida Pounds Key US Crude Area

In a move that could boost energy sector shares on Monday, crude prices rose around 1% after a powerful hurricane ploughed through the Gulf of Mexico, forcing shutdowns and evacuations of hundreds of offshore oil platforms.

U.S. WTI crude oil gained 53 cents or 0.8% at $69.27 a barrel, having jumped a little over 10% over last week.

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