European Equities: A Quiet Day Ahead Leaves Geopolitics and COVID-19 in Focus

Economic Calendar:

Tuesday, 20th April

German PPI (MoM) (Mar)

Thursday, 22nd April

Deposit Facility Rate (Apr)

ECB Interest Rate Decision (Apr)

Eurozone Consumer Confidence Flash

Friday, 23rd April

French Manufacturing PMI (Apr) Prelim

French Services PMI (Apr) Prelim

German Manufacturing PMI (Apr) Prelim

German Services PMI (Apr) Prelim

Eurozone Manufacturing PMI (Apr) Prelim

Eurozone Markit Composite PMI (Apr) Prelim

Eurozone Services PMI (Apr) Prelim

ECB President Lagarde Speaks

The Majors

It was a bullish end to the week for the European majors on Friday.

Following on from a relatively bullish day on Thursday, the DAX30 rallied by 1.34%, to lead the way. The CAC40 and the EuroStoxx600 saw more modest gains of 0.85% and 0.90% respectively.

Positive stats from China and the U.S provided support for the European majors at the end of the week.

Corporate earnings delivered further upside for German autos and the DAX30. At the end of the week, Daimler released prelim Q12021 results. Favorable sales momentum at Mercedes driven by strong demand, from China in particular, delivered better than expected results.

The Stats

It was a relatively quiet day on the economic calendar on Friday.

Finalized inflation figures and trade data for the Eurozone were in focus.

Eurozone Inflation

In March, the annual rate of inflation accelerated from 0.9% to 1.3%. The annual rate of inflation had stood at 0.7% in March 2020.

According to Eurostat,

  • The lowest annual rates of inflation were registered in Greece (-2.0%), Portugal, Malta, Ireland, and Slovenia (all 0.1%).
  • Luxembourg registered the highest annual rate of inflation at 2.5%.
  • The highest contribution to the annual rate of inflation came from services (+0.57 percentage points).
  • There were also contributions from energy (+0.43 pp), food, alcohol, & tobacco (+0.24 pp), and non-energy industrial goods (+0.09 pp).

Trade

In February, the Eurozone’s trade surplus widened from €11.0bn to €17.7bn.

According to Eurostat,

  • Exports of goods to the rest of the world fell by 5.5% to €178.6bn when compared with Feb-2020.
  • Imports from the rest of the world declined by 2.7% to €161.0bn when compared with Feb-2020.
  • Intra-euro area trade rose by 1.7% to €164.8bn when compared with Feb-2020.

From the U.S

It was another busy day, with key stats including consumer sentiment figures. Housing sector data was also in focus but had a muted impact on the majors.

According to April prelim figures, the Michigan Consumer Sentiment Index rose from 84.9 to 86.5.

While up by just 1.9% month-on-month, the index was up 20.5% year-on-year.

Supporting the increase was a 4.5% rise in the Current Economic Conditions Index from 93.0 to 97.2. Year-on-year, the index was up 30.8%.

Holding steady in April, was the Index of Consumer Expectations that remained unchanged at 79.7. Year-on-year, the index was up 13.7%.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Friday. Daimler and Volkswagen rallied 2.79% and by 2.65% respectively, with Continental gaining 2.33%. BMW saw a more modest 0.12% gain on the day.

It was also a bullish day for the banks. Deutsche Bank rose by 1.83%, with Commerzbank ending the day up by 1.23%.

From the CAC, it was a bullish day for the banks. BNP Paribas rallied by 2.20%, with Soc Gen gaining 1.27%. Credit Agricole saw a more modest 0.11% rise on the day.

It was also a bullish day for the French auto sector. Stellantis NV rose by 1.46%, with Renault rallying by 2.29%.

Air France-KLM found much-needed support, rising by 2.24%, with Airbus SE gaining 0.82%.

On the VIX Index

It was a 2nd consecutive week in the red the VIX on Friday, marking a 6th daily fall in 8-sessions.

Following on from a 2.47% fall on Thursday, the VIX fell by 1.93% to end the day at 16.25.

The Dow and the S&P500 rose by 0.48% and by 0.36% respectively, with the NASDAQ gaining 0.10%.

VIX 190421 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the European economic calendar. There are no material stats due out of the Eurozone to provide the European majors with direction.

There are also no stats from the U.S to influence later in the day.

The lack of stats will leave the majors in the hands of geopolitics and COVID-19 vaccine updates from the weekend. Bullish sentiment towards the earnings season should provide some support going into the week, however.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 104 points, while the DAX was up by 23.

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

European Equities: A Week in Review – 16/04/21

The Majors

It was yet another bullish week for the European majors in the week ending 16th April, following relatively modest gains from the week prior.

The CAC40 rallied by 1.91%, with the DAX30 and the EuroStoxx600 seeing gains of 1.48% and by 1.20% respectively.

Economic data from the U.S and China continued to support the unfaltering market optimism. Optimism delivered support in spite of COVID-19 vaccine woes and the resurfacing of geopolitical tensions.

In the week, the U.S introduced fresh sanctions on Russia, while U.S – China relations were also back in the spotlight.

Ultimately, however, positive corporate earnings, together with upbeat stats delivered the upside in the week.

The Stats

It was a busy week on the economic data front.

Key stats included Eurozone retail sales, industrial production, and trade data along with economic sentiment figures for Germany and the Eurozone.

Retail sales rose by more than expected in February, while industrial production hit reverse.

Economic sentiment figures for Germany and the Eurozone were also a disappointment. Sentiment waned in both Germany and the Eurozone.

For Germany, the ZEW Economic Sentiment Index fell from 76.6 to 70.7, while the Eurozone’s declined from 74.0 to 66.3.

At the end of the week, the Eurozone’s trade surplus widened from €11.0bn to €17.7bn, delivering a positive spin at the end of the week.

Throughout the week, inflation figures for member states and the Eurozone were aligned with prelim figures. With the ECB unlikely to shift on policy anytime soon, the pickup in inflationary pressures had a muted impact on the majors.

From the U.S

It was a busier week on the economic data front.

Key stats included inflation, retail sales, and jobless claims figures, which were market risk positive.

A pick in inflationary pressure failed to spook the markets. In spite of the annual core rate of inflation accelerating to 1.6%, the FED’s assurance of unwavering support remained key.

In the week ending 9th April, initial jobless claims decreased from 769k to 576k. Economists had forecast a decline to 700k.

In the month of March, retail sales jumped by 9.8%, reversing a 2.7% decline from February. Core retail sales rose by 8.4%, reversing a 2.5% decline from February.

Economists had forecast retail sales to rise by 5.9% and for core retail sales to increase by 5.0%.

From the manufacturing sector, the Philly FED Manufacturing PMI fell from 51.8 to 50.2 in April. Economists had forecast a sharper decline to 42.0, however.

At the end of the week, stats were also skewed to the positive. The Michigan Consumer Sentiment Index rose from 84.9 to 86.5 in April, according to prelim figures.

From Elsewhere

Economic data from China also delivered support in the week. Trade data impressed at the start of the week, with GDP, retail sales, unemployment, and industrial production numbers supporting demand for riskier assets at the end of the week.

The Market Movers

From the DAX, it was a bullish week for the auto sector. Continental rallied by 5.81%, with Daimler and Volkswagen seeing solid gains of 3.56% and 2.87% respectively. BMW ended the week with more modest 0.41% rise.

It was another mixed week for the banking sector, however. Deutsche Bank rose by 1.16%, while Commerzbank fell by 1.80%.

From the CAC, it was a mixed week for the banks. Credit Agricole fell by 0.56%, while BNP Paribas and Soc Gen ending the week with gains of 2.80% and 2.24% respectively.

It was a bullish week for the French auto sector. Renault rose by 0.89%, with Stellantis NV ending the week up by 2.27%.

Air France-KLM slid by 7.78% on news of the planned ban of domestic flights, while Airbus rose by 2.55%.

On the VIX Index

It was a 4th consecutive week in the red for the VIX in the week ending 16th April. Following on from a 3.69% decline from the previous week, the VIX fell by 2.64% to end the week at 16.25.

3-days in the red from 5 delivered the downside in the week for the VIX.

For the week, the NASDAQ ended the week up by 1.09%, with the Dow and the S&P500 gaining by 1.18% and 1.37% respectively.

VIX 170421 Weekly Chart

The Week Ahead

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

The markets will have to wait until Tuesday for German wholesale inflation figures. With inflationary pressures expected to pickup near-term before easing back, the numbers should have limited impact on the majors, however.

The focus will then shift to prelim April private sector PMIs for France, Germany, and the Eurozone.

Expect plenty of interest in the numbers as the markets look for a continued improvement in private sector conditions.

New orders, employment, and optimism will likely be key areas of focus across both the manufacturing and services sectors.

While the stats will influence, the ECB monetary policy decision and press conference will also be key.

Following the ECB’s vow to ramp up bond purchases, the latest numbers along with the ECB’s economic outlook will be key.

From the U.S, the weekly jobless claims on Thursday and prelim private sector PMIs on Friday will also influence.

Away from the economic calendar, corporate earnings, COVID-19 news, and geopolitics will also need monitoring.

On the geopolitical risk front, the U.S along with China, Russia, and Iran remain areas of focus.

European Equities: Economic Data, Corporate Earnings, and Geopolitics in Focus

Economic Calendar:

Friday, 16th April

Eurozone Core CPI (YoY) (Mar) Final

Eurozone CPI (YoY) (Mar) Final

Eurozone CPI (MoM) (Mar) Final

Eurozone Trade Balance (Feb)

The Majors

It was a bullish day for the European majors on Thursday, with the DAX30 recovering from Wednesday’s slip.

The DAX30 rise by 0.30%, with the CAC40 and the EuroStoxx600 gaining 0.41% and 0.48% respectively.

Once more the markets brushed aside negative COVID-19 vaccine news, with the markets looking beyond current vaccine woes.

Economic data from the U.S impressed to add support, with the markets expecting impressive earnings this season, adding to the ongoing optimism.

The Stats

It was a relatively busy day on the economic calendar on Thursday.

Finalized inflation figures for France, Germany, and Italy were in focus.

Germany

In Germany, consumer prices increased by 0.5% in March, which was in line with prelim figures. In February, consumer prices had risen by 0.7%. The annual rate of inflation accelerated from 1.3% to 1.7%, which was also in line with prelim figures.

According to Destatis,

  • The prices of services were up 1.6%, with prices of goods rising by 1.9% when compared with a year earlier.
  • Energy product prices were 4.8% higher than a year earlier, with food prices up by 1.6% compared with March 2020.

France

From France, consumer prices were also on the rise, with the annual rate of inflation picking up from 0.6% to 1.1%, which was in line with prelim figures. Month-on-month, consumer prices rose by 0.6% in March.

According to Insee.fr,

  • Year-on-year, service prices ticked up from 0.8% to 1.1%, with deflationary pressures for manufactured goods softening from -0.4% to -0.2%.

Italy

In Italy, the annual rate of inflation saw a more modest uptick from 0.6% to 0.8%, which was also in line with prelim figures. Month-on-month, consumer prices increased by 0.6% in March.

From the U.S

It was a busy day, with key stats including jobless claims, retail sales, and Philly FED Manufacturing numbers.

In the week ending 9th April, initial jobless claims decreased from 769k to 576k. Economists had forecast a decline to 700k.

Retail sales also impressed, after the disappointing figures from February.

In the month of March, retail sales jumped by 9.8%, reversing a 2.7% decline from February. Core retail sales rose by 8.4%, reversing a 2.5% decline from February.

Economists had forecast retail sales to rise by 5.9% and for core retail sales to increase by 5.0%.

From the manufacturing sector, the Philly FED Manufacturing PMI fell from 51.8 to 50.2 in April. Economists had forecast a sharper decline to 42.0, however.

Other stats included NY Empire State Manufacturing, industrial production, and business inventory numbers. These stats had a relatively muted impact on the European majors.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Thursday. Volkswagen rallied by 2.26%, with BMW and Continental rising by 1.61% and by 1.22% respectively. Daimler saw a more modest 0.41% gain on the day.

It was a bearish day for the banks, however. Deutsche Bank fell by 0.97%, with Commerzbank ending the day down by 1.93%.

From the CAC, it was a bearish day for the banks. Credit Agricole fell by 1.19%, with BNP Paribas and Soc Gen declining by 0.42% and by 0.92% respectively.

It was also a bearish day for the French auto sector. Stellantis NV slipped by 0.05%, with Renault falling by 0.62%.

Air France-KLM continued to see red, falling by 1.44%, while Airbus SE rallied by 2.61%.

On the VIX Index

It was back into the red the VIX on Thursday, marking a 5th daily fall in 7-sessions.

Reversing a 2.04% gain from Wednesday, the VIX fell by 2.47% to end the day at 16.57.

The NASDAQ and the S&P500 rose by 1.31% and by 1.11% respectively, with the Dow gaining 0.90%.

VIX 160421 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the European economic calendar. Finalized March inflation figures for the Eurozone are due out alongside trade data for the Eurozone.

Barring a marked upward revision, we would expect the trade data to have a greater influence on the European majors.

Later in the day, economic data from the U.S will also influence, with prelim consumer sentiment figures for April in focus.

Ahead of the European session, economic data from China will set the tone early in the day.

Away from the economic calendar, the markets will also need to monitor the news wires as U.S tensions with China and Russia rise.

On the corporate earnings front, Morgan Stanley is due to release results later in the day.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 10 points.

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

European Equities: Corporate Earnings and Economic Data from the U.S in Focus

Economic Calendar:

Thursday, 15th April

German CPI (MoM) (Mar) Final

French CPI (MoM) (Mar) Final

French HICP (MoM) (Mar) Final

Italian CPI (MoM) (Mar) Final

Friday, 16th April

Eurozone Core CPI (YoY) (Mar) Final

Eurozone CPI (YoY) (Mar) Final

Eurozone CPI (MoM) (Mar) Final

Eurozone Trade Balance (Feb)

The Majors

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

The DAX30 fell by 0.17%, while the CAC40 and the EuroStoxx600 gained 0.40% and 0.19% respectively.

Corporate earnings results delivered support to the CAC40 and the EuroStoxx600, with LVMH announcing record high sales.

Positive bank earnings results from the U.S also provided support. Results on Wednesday muted the news of the U.S hitting pause on the roll-out of the Johnson & Johnson vaccine over blood clot concerns.

For the DAX, the talk of downward revisions to growth forecasts weighed mid-week, however.

The Stats

It was a busier day on the economic calendar on Wednesday.

Industrial production figures for the Eurozone and finalized inflation figures from Spain were in focus.

In February, industrial production across the Eurozone fell by 1.0%, reversing a 0.8% increase from January. Economists had forecast a 1.1% fall.

According to Eurostat,

  • Production of capital goods fell by 1.9%, energy by 1.2%, durable consumer goods by 1.1%, and intermediate goods by 0.7%.
  • Non-durable consumer goods production fell by a more modest 0.1% in the month.
  • By member state, France (-4.8%), Malta (-3.8%), and Greece (-2.5%) registered the largest monthly declines.
  • Ireland recorded the largest increase, rising by 4.2% in February.

Compared with February 2020, industrial production was down by 1.6%. In January, production had been up by 0.1% year-on-year.

  • The production of non-durable consumer goods slid by 4.3% when compared with February 2020.
  • Capital goods production (-2.2%) and energy production (-1.5%) were also a drag on the headline number, year-on-year.
  • While the production of intermediate goods slipped by 0.1%, the production of durable consumer goods rose by 0.7%.
  • Malta (-10.9%), Estonia (-8.9%), and France (-6.4%) registered the largest decreases when compared with February 2020.
  • By contrast, Ireland (+41.4%) and Lithuania (+9.7%) registered the largest increases year-on-year.

On the inflation front, Spain’s annual rate of inflation accelerated to 1.3% in March, which was in line with prelim figures. In February, inflation had stalled.

The Harmonized Index for Consumer Prices increased by 1.2% in March, which was also in line with prelim figures. In February, the Index had fallen by 0.1%.

From the U.S

It was a relatively quiet day, with economic data limited to import and export price index figures.

The stats had a muted impact on the majors, however.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. BMW slid by 1.62%, with Daimler falling by 0.82%. Continental and Volkswagen saw relatively modest losses of 0.44% and 0.30% respectively.

It was a bullish day for the banks, however, with U.S corporate earnings results delivering support. Deutsche Bank rose by 0.72%, with Commerzbank ending the day up by 0.89%.

From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.66% and by 0.64% respectively. Soc Gen led the way, however, gaining 1.09%.

It was a mixed day for the French auto sector. Stellantis NV fell by 0.63%, while Renault rose by 1.25%.

Air France-KLM followed Tuesday’s 5.04% slide with a 2.06% loss, while Airbus SE recovered a 1.50% loss with a 1.85% gain.

On the VIX Index

It was back into the green the VIX on Wednesday, marking a 2nd daily gain in 6-sessions.

Reversing a 1.54% fall from Tuesday, the VIX rose by 2.04% to end the day at 16.99.

The NASDAQ and the S&P500 fell by 0.99% and by 0.41% respectively, while the Dow rose by 0.16%.

VIX 150421 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the European economic calendar. Finalized March inflation figures for France, Germany, and Italy are due out.

Barring a marked upward revision, however, we don’t expect the numbers to provide the majors with direction.

Later in the day, economic data from the U.S will influence, however.

Key stats include the weekly jobless claims, retail sales, and Philly FED Manufacturing PMI numbers.

Other stats due out of the U.S include NY Empire State Manufacturing, business inventory, and industrial production figures. We don’t expect too much influence from these stats, however.

On the day, corporate earnings will also be in focus. Bank of America, BlackRock, Citigroup, and PepsiCo are amongst the big names announcing results later in the day.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 63 points, while the DAX was down by 15 points.

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

European Equities: Economic Data, ECB President Lagarde, and Corporate Earnings in Focus

Economic Calendar:

Wednesday, 14th April

Spanish CPI (YoY) (Mar) Final

Spanish HICP (YoY) (Mar) Final

Eurozone Industrial Production (MoM) (Feb)

Thursday, 15th April

German CPI (MoM) (Mar) Final

French CPI (MoM) (Mar) Final

French HICP (MoM) (Mar) Final

Italian CPI (MoM) (Mar) Final

Friday, 16th April

Eurozone Core CPI (YoY) (Mar) Final

Eurozone CPI (YoY) (Mar) Final

Eurozone CPI (MoM) (Mar) Final

Eurozone Trade Balance (Feb)

The Majors

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

The CAC40 rose by 0.36%, with the DAX30 and the EuroStoxx600 gaining 0.13% and 0.12% respectively.

Impressive trade data from China delivered support to riskier assets, while a pickup in U.S inflationary pressures failed to weigh on the majors.

Assurances from the FED of low for longer left the markets desensitized on the day.

Economic data from the Eurozone pegged the majors back, however, as economic sentiment across Germany and the Eurozone waned in April.

The Stats

It was another relatively quiet day on the economic calendar on Tuesday.

ZEW Economic Sentiment figures for Germany and the Eurozone were in focus early in the European session.

In April, Germany’s ZEW Economic Sentiment Indicator fell from 76.6 to 70.7. Economists had forecast a rise to 79.0. The Current Conditions indicator rose from -61.0 to -48.8. Economist had forecast an increase to -53.0.

For the Eurozone, the Economic Sentiment Indicator fell from 74.0 to 66.3.

From the U.S

It was a relatively busy day, with inflation figures in focus.

In March, the annual rate of core inflation ticked up from 1.3% to 1.6%, coming in ahead of a forecasted 1.5%.

Month-on-month, core consumer prices increased by 0.3%, following a 0.1% rise in February. Economists had forecast a 0.2% increase.

Consumer prices increased by 0.6%, following a 0.4% rise in February. Economists had forecast a 0.5% increase.

From Elsewhere

Earlier in the day, trade data from China had set the tone ahead of the European open.

In March, China’s USD trade surplus widened from $103.25bn to $116.35bn. Economists had forecast a narrowing to $52.05bn.

Exports increased by 49.0%, following a 60.6% surge in February, with imports rising by 38.1%. In February, imports had risen by 22.2%.

Economists had forecast exports to increase by 35.5% and imports to rise by 23.3%.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Tuesday. Continental rose by 1.53% to buck the trend on the day. Volkswagen slid by 1.00%, with BMW and Daimler falling by 0.46% and by 0.55% respectively.

It was a bearish day for the banks, however. Deutsche Bank declined by 1.06%, with Commerzbank ending the day down by 1.59%.

From the CAC, it was another mixed day for the banks. BNP Paribas rose by 0.43%, while Credit Agricole and Soc Gen ended the day with modest losses of 0.08% and 0.05% respectively.

It was also a mixed day for the French auto sector. Stellantis NV rose by 1.39%, while Renault fell by 1.83%.

Air France-KLM took the biggest hit, however, sliding by 5.04%, with Airbus SE ending the day down by 1.50%. Talk of the French government planning to ban domestic flights delivered the downside for Air France-KLM.

On the VIX Index

It was back into the red the VIX on Tuesday, marking a 4th daily loss in 5-sessions.

Reversing a 1.32% rise from Tuesday, the VIX fell by 1.54% to end the day at 16.65.

The NASDAQ and the S&P500 rose by 1.05% and by 0.33% respectively, while the Dow fell by 0.20%.

VIX 140421 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the European economic calendar. Eurozone industrial production figures for February are due out later today.

Finalized March inflation figures from Spain are also due out but will likely have a muted impact on the European majors.

From the U.S, import and export price figures are due out that should also have a muted impact on the European boerses.

On the monetary policy front, ECB President Lagarde is scheduled to speak later in the day. Expect any chatter on the economy or monetary policy to influence.

From the FED, FED Chair Powell is also scheduled to speak but after the European close.

On the day, corporate earnings will also be in focus. The U.S banking sector will be in the spotlight, with Goldman Sachs, JPMorgan Chase, and Wells Fargo announcing results later in the day.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 32 points, while the DAX was up by 11 points.

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

European Equities: German and Eurozone Economic Sentiment in Focus

Economic Calendar:

Tuesday, 13th April

German ZEW Economic Sentiment (Apr)

German ZEW Current Conditions (Apr)

Eurozone ZEW Economic Sentiment (Apr)

Wednesday, 14th April

Spanish CPI (YoY) (Mar) Final

Spanish HICP (YoY) (Mar) Final

Eurozone Industrial Production (MoM) (Feb)

Thursday, 15th April

German CPI (MoM) (Mar) Final

French CPI (MoM) (Mar) Final

French HICP (MoM) (Mar) Final

Italian CPI (MoM) (Mar) Final

Friday, 16th April

Eurozone Core CPI (YoY) (Mar) Final

Eurozone CPI (YoY) (Mar) Final

Eurozone CPI (MoM) (Mar) Final

Eurozone Trade Balance (Feb)

The Majors

It was a relatively bearish start to the week on Monday. The EuroStoxx600 fell by 0.46%, with the CAC40 and DAX30 both ending the day down by 0.13%.

Economic data was in the lighter side throughout the day, leaving the majors with little direction.

The lack of stats left concerns over the impact of low vaccination rates across the EU on the economic outlook to peg the majors back.

The Stats

It was a quieter day on the economic calendar on Monday.

In February, retail sales increased by 3.0% month-on-month, partially reversing a 5.2% slide from January. Economists had forecast a 1.5% rise.

According to Eurostat,

  • The volume of retail trade increased by 6.8% for non-food products and by 3.7% for automotive fuels.
  • Sales of food, drinks, and tobacco fell by 1.1%, however.
  • By member state, Austria (+28.2%), Slovenia (+16.4%), and Italy (+8.4%) reported the largest increase in sales.
  • Malta (-1.5%) and France (-1.2%) registered the largest decreases in the month of February.
  • In February 2021 compared with February 2020, the volume of retail trade decreased by 2.9%.

From the U.S

It was a particularly quiet start to the week, with no material stats from the U.S to provide the majors with direction.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Daimler led the way, rising by 1.72%, with Continental and BMW gaining 1.06% and 0.96% respectively. Volkswagen bucked the trend, however, falling by 0.72%.

It was also a mixed day for the banks. Deutsche Bank rose by 0.68%, while Commerzbank fell by 0.32%.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole slipped by 0.08% and 0.03% respectively. Soc Gen found support, however, rising by 0.87%.

It was also a mixed day for the French auto sector. Stellantis NV rose by 0.93%, while Renault declined by 0.17%.

Air France-KLM and Airbus SE ended the day with losses of 1.56% and 1.19% respectively.

On the VIX Index

A run of 3 consecutive days in the red came to an end for the VIX on Monday.

Partially reversing a 1.53% decline on Friday, the VIX rose by 1.32% to end the day at 16.91.

The NASDAQ fell by 0.36%, with the Dow and the S&P500 ending the day with modest losses of 0.16% and 0.02% respectively.

VIX 130421 Daily Chart

The Day Ahead

It’s a busier day ahead on the European economic calendar. April ZEW Economic Sentiment figures for Germany and the Eurozone will be in focus later today.

Expect plenty of interest in the numbers, with market sensitivity to sentiment on the rise of late.

From the U.S, March inflation figures will also draw interest later in the day.

Away from the economic calendar, updates on the EU’s vaccination program will also need monitoring on the day.

The Futures

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

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

European Equities: Eurozone Retail Sales and COVID-19 News in Focus

Economic Calendar:

Monday, 12th April

Eurozone Retail Sales (MoM) (Feb)

Tuesday, 13th April

German ZEW Economic Sentiment (Apr)

German ZEW Current Conditions (Apr)

Eurozone ZEW Economic Sentiment (Apr)

Wednesday, 14th April

Spanish CPI (YoY) (Mar) Final

Spanish HICP (YoY) (Mar) Final

Eurozone Industrial Production (MoM) (Feb)

Thursday, 15th April

German CPI (MoM) (Mar) Final

French CPI (MoM) (Mar) Final

French HICP (MoM) (Mar) Final

Italian CPI (MoM) (Mar) Final

Friday, 16th April

Eurozone Core CPI (YoY) (Mar) Final

Eurozone CPI (YoY) (Mar) Final

Eurozone CPI (MoM) (Mar) Final

Eurozone Trade Balance (Feb)

The Majors

It was a relatively bullish end to the week for the European majors on Friday.

The CAC40 and the EuroStoxx600 rose by 0.06% and by 0.08% respectively, with the DAX30 gaining by 0.21%.

At the end of the week, the upside for the DAX30 came in spite of some disappointing stats from Germany on the day.

More positive news on the EU vaccine front continued to drive market optimism of a rapid economic recovery.

The Stats

It was a busier day on the economic calendar on Friday.

The German economy was back in focus ahead of the European open this morning, with stats from France and Italy also on the docket.

Germany

Industrial production fell by 1.6% in February, month-on-month, following a revised 2% decline in January. Economists had forecast a 1.5% rise.

According to Destatis,

  • Production in industry excl. energy and construction was down 1.8%.
  • Within industry, the production of capital goods slid by 3.2%, with the production of intermediate goods falling by 1.0%.
  • The production of consumer goods increased by 0.2%.
  • Outside industry, energy production was down 1.0%, with the production of construction falling 1.3%.
  • Compared with February 2020, the month before the intro of COVID-19 restrictions, production was down 6.4%.

In February, Germany’s trade surplus narrowed from €22.2bn to €19.1bn, versus a forecasted narrowing to €20.0bn.

According to Destatis,

  • Exports rose by 0.9% on the previous month to €107.8bn, while imports increased by 3.6% to €89.7bn.
  • Compared with Feb-2020, exports fell by 1.2%, while imports increased by 0.9%.
  • The foreign trade balance showed a surplus of €18.1bn in February 2021 compared with €20.3bn in February 2020.

Trade with EU countries:

  • Germany exports to the EU slipped by 0.3%, while imports rose by 0.7% compared with February 2020.
  • To euro area countries, German exports fell 0.9%, with imports falling by 0.6%.
  • Goods to EU countries outside of the euro area rose by 1.2%, with imports increasing by 3.7%.

Trade with non-EU countries:

  • Exports of goods to countries outside of the EU fell by 2.3% when compared with February 2020.
  • Imports to non-EU countries increased by 1.1%.

Trade with the UK

  • Compared with Feb-2020, exports to the UK slid by 12.2% in February 2021.
  • Imports from the UK tumbled by 26.9%.

Other notables:

  • To China, exports jumped by 25.7% when compared with February 2020.
  • By contrast, exports to the U.S fell by 0.6%.

Other stats

From France, the stats were also skewed to the negative, with industrial production sliding by 4.7% in February. Economists had forecast a 0.5% rise following a 3.2% increase in January.

Italian retail sales figures were upbeat, however. In February, retail sales jumped by 6.6%, reversing a 2.7% slide from January.

From the U.S

It was another quiet day on the economic calendar, with economic data limited to wholesale inflation figures for March.

The markets were expecting a pickup in wholesale inflationary pressures and there were no disappointments.

The core producer price index rose by 0.7% in March, following a 0.2% increase in February. Month-on-month, the producer price index jumped by 1.0%, following a more modest 0.5% rise in February.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Friday. Daimler rose by 1.12% to buck the trend on the day. Continental slid by 1.47%, however, with BMW and Volkswagen falling by 0.28% and by 0.86% respectively.

It was a bearish day for the banks, however. Deutsche Bank declined by 0.44%, with Commerzbank ending the day down by 1.21%.

From the CAC, it was a mixed day for the banks. BNP Paribas and Soc Gen ended the day with losses of 1.04% and 1.60% respectively. Credit Agricole found support, however, eking out a 0.05% gain.

It was a bearish day for the French auto sector, however. Stellantis NV fell by 0.86%, with Renault declining by 1.59%.

Air France-KLM found support, rising by 1.66%, with Airbus SE ending the day up by 0.30%.

On the VIX Index

It was a 3rd consecutive day in the red for the VIX on Friday.

Following on from a 1.22% decline on Thursday, the VIX fell by 1.53% to end the day at 16.69.

The NASDAQ rose by 0.51%, with the Dow and the S&P500 gaining 0.89% and 0.77% respectively.

VIX 120421 Daily Chart

The Day Ahead

It’s a quiet day ahead on the European economic calendar. February retail sales figures for the Eurozone are due out later today.

With little else to consider from the economic calendar, we can expect some market sensitivity to the numbers.

From the U.S, there are no material stats to provide direction, leaving the majors in the hands of COVID-19 news later in the day.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 46 points, while the DAX was up by 20.

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

European Equities: A Week in Review – 09/04/21

The Majors

It was a relatively bullish week for the European majors in the week ending 9th April, following solid gains from the week prior.

The CAC40 and the EuroStoxx600 rose by 1.09% and by 1.16% respectively, with the DAX ending the week up by 0.84%.

Economic data through the week delivered mixed results. Survey-based PMI numbers continued to show improving conditions across the services sector.

Stats from Germany were mixed, however, coinciding with the ECB monetary policy meeting minutes that warned of downside risks near-term.

In spite of a mixed week on the data front, optimism continued to support the European majors.

Assurances of unwavering support from the FED and the ECB’s pledge to ramp up bond purchases were market positives.

Plans by the EU to ramp up vaccinations in the coming weeks, with some member states hit record daily vaccination numbers in the week was also positive. Vaccine shortages for the EU has been an ongoing concern as member states struggle with lockdown measures.

The Stats

Mid-week, service sector PMIs for March were in focus.

The stats were skewed to the positive, with only Italy reporting a decline in its services PMI.

For the Eurozone, the composite PMI increased from 48.8 to 53.2, which was up from a prelim 52.5. A return to growth across the private sector came in spite of containment measures across a number of Eurozone member states.

From Germany, factory orders, industrial production, and trade data were also in focus.

Orders rose for a 2nd consecutive month, driven by domestic demand.

Industrial production and trade data disappointed, however.

Industrial production fell by 1.6% in February, month-on-month, following a revised 2% decline in January. Economists had forecast a 1.5% rise.

In February, Germany’s trade surplus narrowed from €22.2bn to €19.1bn, versus a forecasted narrowing to €20.0bn.

On the monetary policy front, the ECB meeting minutes also influenced. While highlighting downside risks to the economy near-term, optimism was evident over the medium-term outlook.

In line with Lagarde’s assurances from the press conference, the minutes revealed a plan to ramp up bond purchases in the near-term. The minutes did discuss a quarterly review, however…

From the U.S

It was a mixed set of numbers for the Greenback.

The market’s preferred ISM Non-Manufacturing PMI rose from 55.3 to 63.7 in March. It was the only positive, however.

In February, factory orders fell by 0.8%, partially reversing a 2.7% rise from January.

Jobless claims figures were also disappointing, with initial jobless claims increasing from 728k to 744k in the week ending 2nd April. Economists had forecast a fall to 680k.

Other stats in the week included Jolt’s job openings, trade data, wholesale inflation, and Markit service PMIs.

These stats had a relatively muted impact on the Dollar and the broader markets, however.

On the monetary policy front, the FOMC meeting minutes reaffirmed FED Chair Powell’s stance on low for longer. Late in the week, Powell also delivered a speech talking of the need for unwavering monetary policy support.

The Market Movers

From the DAX, it was a bearish week for the auto sector. Continental slid by 2.66%, with BMW and Volkswagen declining by 0.92% and by 1.25% respectively. Daimler ended the week with more modest 0.41% loss.

It was another mixed week for the banking sector, however. Deutsche Bank rose by 0.58%, while Commerzbank slid by 3.44%.

From the CAC, it was a mixed week for the banks. Credit Agricole rose by 0.72%, while BNP Paribas and Soc Gen ending the week with losses of 1.32% and 3.44% respectively.

It was a bearish week for the French auto sector. Renault slid by 5.66%, with Stellantis NV ending the week down by 1.41%.

Air France-KLM and Airbus found further support from the week prior, gaining 5.06% and 0.68% respectively.

On the VIX Index

It was a 3rd consecutive week in the red for the VIX in the week ending 9th April. Following on from an 8.11% decline from the previous week, the VIX fell by 3.69% to end the week at 16.69.

3 consecutive days in the red that included a 5.3% slide on Wednesday left the VIX in the red for the week.

For the week, the NASDAQ ended the week up by 3.12%, with the Dow and the S&P500 gaining by 1.95% and 2.71% respectively.

VIX 090421 Weekly Chart

The Week Ahead

It’s another busy week ahead on the economic calendar.

Early in the week, Eurozone retail sales and ZEW economic sentiment figures for Germany and the Eurozone will be in focus.

While consumer spending is key to the economic recovery, sensitivity to ZEW sentiment figures has picked up recently.

Mid-week, Eurozone industrial production figures are due out ahead of Eurozone trade figures on Friday.

Throughout the week, member state and Eurozone prelim inflation figures will also draw attention.

From the U.S, it’s a busy week ahead.

Early in the week, March inflation figures are due out ahead of a particularly busy Thursday.

Retail sales, jobless claims, industrial production, and Philly FED Manufacturing PMI numbers are due out.

We would expect the retail sales and jobless claim figures to have the greatest impact on the Dollar and market risk sentiment.

At the end of the week, prelim consumer sentiment figures for April wrap things up.

From elsewhere, stats from China will have a material impact on market risk sentiment in the week.

Early in the week trade data will draw attention. The markets are looking for a continued improvement in global trade terms.

At the end of the week, 1st quarter GDP numbers will be the key driver, however.

Other stats from China on Friday include industrial production, fixed asset investment, retail sales, and unemployment numbers.

Away from the economic calendar, geopolitics and COVID-19 news updates will need monitoring in the week.

Corporate earnings season also kicks off, with the markets expecting strong results…

European Equities – German Industrial Production and Trade in Focus

Economic Calendar:

Friday, 9th April

German Industrial Production (MoM) (Feb)

German Trade Balance (Feb)

The Majors

It was a relatively bullish day for the European majors on Thursday, after Wednesday’s relatively bearish session.

The CAC40 and the EuroStoxx600 rose by 0.57% and by 0.58% respectively, with the DAX30 gaining by 0.17%.

It was fresh highs for the majors on Thursday, with the FOMC meeting minutes from late Wednesday delivering support.

Following the FOMC economic projections and FED Chair Powell’s testimonies, the minutes reaffirmed Powell’s assurances. Low for longer was good enough to drive the European majors to fresh record highs.

The ECB meeting minutes also affirmed the intent to ramp up bond purchases near-term to address rising yields.

The Stats

It was a quiet day on the economic calendar on Thursday. The German economy was back in focus with factory orders in focus.

In February, factory orders increased by 1.2% month-on-month, which was in line with forecasts. In January, orders had risen by 1.4%.

According to Destatis,

  • Domestic orders increased by 4.0%, while foreign orders slipped by 0.5% in the month.
  • New orders from the euro area rose by 2.7%, while new orders from other countries slid by 2.3%.
  • Manufacturers of intermediate goods saw new orders increase by 0.5%, with orders for capital goods rising by 2.1%.
  • New orders for consumer goods fell by 1.9%, however.
  • When compared with February 2020, new orders were up 5.6%.

On the monetary policy front, the ECB monetary policy meeting minutes were also in focus.

Salient points from the monetary policy considerations and policy options included:

  • While the overall economic situation would improve throughout 2021, uncertainty in the euro area remained high.
  • Persistently high rates of COVID-19 infection, the spread of virus mutations, and the speed of vaccination campaigns remain key issues.
  • Looking beyond the short-term weakness, euro area economic activity was expected to gain momentum in the course of the year.
  • Over the medium-term the recovery should be supported by favorable financial conditions, an expansionary fiscal stance, and a recovery in demand as containment measures were gradually lifted.
  • Vis-à-vis managing rising government bond yields and borrowing costs, the ECB proposed that net purchases under the PEPP be increased significantly over the next quarter.
  • The ECB should review the purchase pace on a quarterly basis.
  • Additionally, the Governing Council reiterated that it stood ready to adjust all of its instruments to ensure inflation moved towards its aim in a sustained manner.

From the U.S

It was another quiet day on the economic calendar, with economic data limited to weekly jobless claim figures.

In the week ending 2nd April, initial jobless claims rose from a previous week 728k to 744k.

Economists had forecast a fall to 680k.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. Continental and Daimler slid by 1.62% and by 1.47% respectively, with Volkswagen falling by 0.97%. BMW ended the day with a more modest 0.79% loss.

It was also a bearish day for the banks. Deutsche Bank and Commerzbank fell by 1.05% and by 1.88% respectively.

From the CAC, it was a mixed day for the banks. BNP Paribas and Soc Gen ended the day down by 0.55% and by 1.83% respectively. Credit Agricole found support, however, gaining 0.21%.

It was a particularly bearish day for the French auto sector, however. Stellantis NV fell by 2.30%, with Renault sliding by 3.47%.

Air France-KLM gave up some of Wednesday’s gains with a 3.17% loss, while Airbus SE eked out a 0.26% gain.

On the VIX Index

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

Following on from a 5.3% slide on Wednesday, the VIX fell by 1.22% to end the day at 16.95.

The NASDAQ rose by 1.03%, with the Dow and the S&P500 gaining 0.17% and 0.42% respectively.

VIX 090421 Daily Chart

The Day Ahead

It’s a busier day ahead on the European economic calendar. German industrial production and trade figures for February are due out later today.

The markets will be looking for positive numbers and a pick up in overseas exports of goods to be aligned with the survey-based PMI numbers.

From the U.S, wholesale inflation figures for March will also draw attention late in the European session.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 59 points.

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

European Equities – German Factory Orders and the ECB Minutes in Focus

Economic Calendar:

Thursday, 8th April

German Factory Orders (MoM) (Feb)

German IHS Markit Construction PMI (Mar)

Friday, 9th April

German Industrial Production (MoM) (Feb)

German Trade Balance (Feb)

The Majors

It was a relatively bearish day for the European majors on Wednesday, after Tuesday’s visit to new record highs.

The DAX30 and the EuroStoxx600 fell by 0.24% and by 0.22% respectively, with the CAC40 slipping by 0.01%.

For the majors, Wednesday’s pause in the upward trend came in spite of positive economic data from the Eurozone early in the session.

With the EU now focused on ramping up the vaccination rate and with the private sector returning to growth, further upward momentum is anticipated.

Downside risks do remain, however, these being a shift in monetary policy and COVID-19. Failure to ramp up vaccination rates or a new resilient strain of the coronavirus would test market optimism…

The Stats

It was a busier start to the day on the economic calendar today. Following some impressive manufacturing PMI numbers last week, the services sector was in the spotlight this morning.

Service Sector PMIs for March

Service sector PMI figures for Italy and Spain were in focus in the early part of the European session.

Finalized PMI numbers for France, Germany, and the Eurozone were also in focus.

In March, Spain’s services PMI increased from 43.1 to 48.1. Economists had forecast a rise to 46.0.

Italy’s services PMI slipped from 48.8 to 48.6, however falling short of a forecasted 49.0. For Italy’s services sector, business activity fell once more, with new work also declining. As a result, firms reduced headcount at the end of the quarter.

For France, the services PMI increased from 45.6 to 48.2. This was up from a prelim 47.8. The sector contracted at the slowest pace in 3-months, with the rate of new business also falling at the slowest pace in 3-months. Job creation rose at its strongest since before the pandemic.

Germany’s services PMI rose from 45.7 to 51.5. This was up from a prelim 50.8. The upward revision led to an upward revision of Germany’s composite from 56.8 to 57.3. In February, Germany’s composite had stood at 51.1.

An easing of lockdown measures helped lift service sector activity. The pace of hiring also increased at a faster pace in spite of rising cost pressures. Optimism jumped to its highest level since March 2018, supported by hopes of an effective COVID-19 vaccine program.

Eurozone Private Sector Activity

In March, the Eurozone’s services PMI increased from 45.7 to 49.6. This was up from a prelim 48.8.

A jump in manufacturing sector activity and a slower contraction in service sector activity led to a rise in the composite PMI.

The composite PMI increased from 48.8 to 53.2 in March, which was up from a prelim 52.5.

According to the finalized Markit survey,

  • Driven by a record increase in manufacturing output, the Eurozone’s private sector economy returned to growth in March.
  • The Composite Output Index rose to its highest level since last July.
  • Service sector output fell at its slowest pace in the current 7-month sequence of contraction.
  • An increase in new orders supported the pickup in overall private sector activity.
  • Overall, new sales rose at its sharpest degree in two-and-a-half years, driven by both domestic and overseas demand.
  • New export business increased at the strongest pace in over six-and-a-half years.
  • As a result of increased demand, backlogs of unfinished business rose for the first time since November 2018.
  • The pace of hiring rose at the most marked pace since June 2019, with both manufacturing and services hiring.
  • Business confidence improved to a 37-month peak at the end of the 1st

From the U.S

It was a quieter day on the economic calendar, with economic data limited to trade data.

In February, the U.S trade deficit widened from $67.8bn to $71.1bn.

The stats had a muted impact on the European majors, however, with impressive private sector PMI and labor market figures supporting the particularly optimistic U.S economic outlook.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. Volkswagen slid by 1.61%, with BMW ended the day with a 0.46% loss. Continental and Daimler found support, however, rising by 0.14% and by 0.25% respectively.

It was also a mixed day for the banks. Deutsche Bank rose by 1.57%, while Commerzbank slipped by 0.15%.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.65% and by 0.47% respectively, with Soc Gen gaining 0.07%.

It was a bearish day for the French auto sector, however. Stellantis NV slipped by 0.01%, with Renault declining by 1.27%.

Air France-KLM rallied by 5.06% supported by the assurances of government support, while Airbus SE fell by 0.16%.

On the VIX Index

It was back into the red for the VIX on Wednesday, following two consecutive days in the green.

Reversing a 1.17% gain from Tuesday, the VIX fell by 5.30% to end the day at 17.16.

The NASDAQ fell by 0.07%, while the Dow and the S&P500 rose by 0.05% and by 0.15% respectively.

VIX 080421 Daily Chart

The Day Ahead

It’s a quieter day ahead on the European economic calendar. German factory order figures for February are due out later today.

The markets will be looking for positive numbers to be aligned with the upward trend in the survey-based PMI numbers.

On the monetary policy front, the ECB monetary policy meeting minutes will also draw attention later in the day.

Following the last ECB press conference and the promise to ramp up bond purchases, any resistance to continued and unwavering support would weigh on the majors.

From the U.S, it’s another quiet day on the economic calendar. The weekly jobless claims figures will draw attention later in the session.

We can expect some resilience to an uptick in claims, however, following last week’s NFP numbers for March.

Away from the stats, expect increased sensitivity to any negative news updates on COVID-19 and any pick up in geopolitical risk.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 53 points, with the DAX up by 63 points.

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

European Equities – Service Sector PMIs In Focus

Economic Calendar:

Wednesday, 7th April

Spanish Services PMI (Mar)

Italian Services PMI (Mar)

French Services PMI (Mar) Final

German Services PMI (Mar) Final

Eurozone Markit Composite PMI (Mar) Final

Eurozone Services PMI (Mar) Final

Thursday, 8th April

German Factory Orders (MoM) (Feb)

German IHS Markit Construction PMI (Mar)

Friday, 9th April

German Industrial Production (MoM) (Feb)

German Trade Balance (Feb)

The Majors

It was a bullish start to the week for the European majors on Tuesday, which visited record highs after the holidays.

The DAX30 and the EuroStoxx600 each rose by 0.70% respectively, with the CAC40 gaining 0.48%. It had been a particularly bullish start to the day before the majors eased back from their record highs on the day.

Impressive economic data from the U.S had delivered early support to the European majors, which were playing catch up. The European boerses had been closed on Friday and Monday.

The Stats

It was a quiet day on the economic calendar on Tuesday. Eurozone unemployment figures for February were in focus on the day.

In the month of February, the Eurozone’s unemployment rate held steady at 8.3%. January’s unemployment rate was revised up from 8.1% to 8.3%. Economists had forecast an unemployment rate of 8.1%.

According to Eurostat,

  • While unchanged from January 2021, the unemployment rate was up from a February 2020 7.3%.
  • Eurostat estimated that 13.571m people were unemployed in the euro area in February, rising by 48,000 from January.
  • Compared with February 2020, unemployment rose by 1.507m in the euro area.

From the U.S

It was a quieter day on the economic calendar, with economic data limited to JOLTs job openings.

In February, openings rose from an upwardly revised 7.099m to 7.367m. Economists had forecasts opening to come in at 6.995m.

Following impressive nonfarm payroll figures for March, however, the stats had a muted impact on the majors.

Ahead of the European Open

Private sector PMI figures from China impressed.

In March, the Caixin services PMI increased from 51.5 to 54.3, countering the slower growth reported across the manufacturing sector.

China’s stats had added to the upside for the European majors going into the open.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. Daimler fell by 0.29% to buck the trend, while Volkswagen rallied by 2.23%. BMW and Continental ended the day with relatively modest gains of 0.61% and 0.28% respectively.

It was also a mixed day for the banks. Deutsche Bank rose by 0.51%, while Commerzbank slipped by 0.29%.

From the CAC, it was a mixed day for the banks. BNP Paribas and Soc Gen fell by 0.38% and by 0.13% respectively, while Credit Agricole eked out a 0.03% gain.

It was also a bullish day for the French auto sector, however. Stellantis NV rose by 1.18%, with Renault gaining 0.61%.

Air France-KLM and Airbus SE also found support, ending the day with gains of 1.64% and 0.28% respectively.

On the VIX Index

It was a 2nd consecutive day in the green for the VIX on Tuesday.

Following on from a 3.35% gain on Monday, the VIX rose by 1.17% to end the day at 18.12.

The NASDAQ and the S&P500 slipped by 0.05% and by 0.10% respectively, with the Dow falling by 0.29%.

VIX 070421 Daily Chart

The Day Ahead

It’s a busy day ahead on the European economic calendar. Service sector PMIs for Italy and Spain are due out later this morning.

Finalized service and composite PMIs for France, Germany, and the Eurozone will also be in focus.

Barring a marked deviation from prelims, expect Italy and the Eurozone’s PMIs to garner the greatest interest.

From the U.S, it’s a quiet day on the economic calendar, with trade data for February due out.

We don’t expect the numbers to have a material impact on the European majors, however.

Away from the stats, expect news updates on COVID-19 to continue to be an area of focus.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 30 points.

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

European Equities – Economic Data and COVID-19 News in Focus after the Holidays

Economic Calendar:

Tuesday, 6th April

Eurozone Unemployment Rate (Feb)

Wednesday, 7th April

Spanish Services PMI (Mar)

Italian Services PMI (Mar)

French Services PMI (Mar) Final

German Services PMI (Mar) Final

Eurozone Markit Composite PMI (Mar) Final

Eurozone Services PMI (Mar) Final

Thursday, 8th April

German Factory Orders (MoM) (Feb)

German IHS Markit Construction PMI (Mar)

Friday, 9th April

German Industrial Production (MoM) (Feb)

German Trade Balance (Feb)

The Majors

It was a bullish end to the week for the European majors last Thursday. The DAX30 and the EuroStoxx600 rose by 0.66% and by 0.61% respectively, with the CAC40 gaining 0.59%.

Economic data from the Eurozone and the U.S drove the DAX30 to a record high and the EuroStoxx600 to within range of its all-time high.

Adding further support to riskier assets was the U.S administration’s spending plans that is expected to further drive economic growth.

The market’s optimistic outlook offset negative sentiment towards COVID-19 and vaccine shortages across the EU. This was in spite of the World Health Organization putting the spotlight on the EU and its struggles to bring the pandemic under control.

The Stats

It was a busy day on the economic calendar on Thursday. German retail sales and Spanish and Italian manufacturing PMIs were in focus.

Finalized manufacturing PMIs for France, Germany, and the Eurozone also drew attention, however.

German Retail Sales

In the month of February, retail sales rose by 1.2% to partially reverse a 4.5% slide in January. Economists had forecast a 2% increase.

According to Destatis,

  • In comparison to February 2020, the month before the COVID-19 outbreak in German, turnover was 5.4% lower in February 2021.
  • Retail sales were down 9% on the same month a year earlier.

Manufacturing Sector PMIs

Both Spain and Italy reported a pickup in manufacturing sector activity.

In March, Spain’s manufacturing PMI rose from 52.9 to 56.9, it’s highest level since Dec-2006, with Italy’s PMI increasing from 56.9 to 59.8. The March jump in Italy signaled the steepest improvement in manufacturing conditions for 21 years.

Economists had forecasted Spain’s PMI to rise to 56.0 and for Italy’s to rise to 59.8.

For France, Germany, and the Eurozone, finalized manufacturing PMI for March were also in focus.

The French Manufacturing PMI rose from 56.1 to 59.3, which was up from a prelim 58.8.

Germany’s Manufacturing PMI increased from 60.7 to an all-time high 66.6, which was in line with prelim.

The Eurozone

In March, the Eurozone’s Manufacturing PMI increased from 57.9 to 62.5, which was up from a prelim 62.4.

According to the March survey,

  • There were record increases in output, new orders, exports, and purchasing activity.
  • Supply side delays drove input costs up at the sharpest pace in a decade.

By country, Germany and the Netherlands ranked 1st and 2nd with record high PMIs.

Austria ranked 3rd with a 39-month high 63.4. Italy and France saw PMIs hit 252-month and 246-month highs.

Greece sat at the bottom of the table with a 13-month high 51.8.

From the U.S

Manufacturing sector PMI numbers were also in focus along with weekly jobless claim figures.

The stats were mixed on the day, with a pickup in initial jobless claims disappointing late in the European session.

In the week ending 26th March, initial jobless claims increased from a revised 658k to 719k. Economists had forecast a more modest increase to 680k.

Manufacturing PMI numbers were positive, however.

The ISM Manufacturing PMI increased from 60.8 to 64.7 in March, with the employment sub-index climbing from 54.4 to 59.6.

Ahead of the European Open

Private sector PMI figures from China failed to peg the majors back in spite of slower growth in the manufacturing sector.

China’s Caixin Manufacturing PMI slipped from 50.9 to 50.6 in March. While down to an 11-month low, optimism across the sector was up in the month, which limited the damage.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Daimler fell by 0.55%, while Volkswagen and BMW ended the day with gains of 0.65% and 0.43% respectively. Continental rose by 1.33%, however, to lead the way.

It was a relatively bullish day for the banks, however. Deutsche Bank and Commerzbank rose by 0.41% and by 0.23% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.52% and by 0.75% respectively, with Soc Gen gaining 1.64%.

It was also a bullish day for the French auto sector. Stellantis NV rose by 0.34%, with Renault rallying by 2.79%.

Air France-KLM rose by 0.78%, with Airbus SE jumping by 4.02%.

On the VIX Index

It was a 3rd consecutive day in the red for the VIX on Thursday.

Following on from a 1.07% decline on Wednesday, the VIX slid by 10.67% to end the day at 17.33.

The NASDAQ and the S&P500 rose by 1.76% and by 1.18% respectively, with the Dow gaining by 0.52%.

VIX 060421 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the European economic calendar. Eurozone unemployment figures for March are due out later this morning.

Barring particularly dire numbers, however, the stats should have limited impact on the European majors.

With France and a number of other member states reintroducing lockdown measures, February’s stats will be considered dated.

From the U.S, JOLTs job openings for February are due out later today. We would also expect these numbers to have a muted impact on the majors.

With the European markets having been closed on Friday and Monday, expect last week’s NFP numbers and Monday’s ISM Non-Manufacturing PMI figures from the U.S to have greater influence.

Both the ISM Non-Manufacturing PMI and nonfarm payroll figures were positive for riskier assets.

Ahead of the European open today, service sector PMI numbers from China will also draw attention.

Away from the stats, expect increased sensitivity to any negative news updates on COVID-19 and any pick up in geopolitical risk.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 41 points, while the DAX30 was up by 188 points.

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

European Equities: A Week in Review – 02/04/21

The Majors

It was a bullish week for the European majors in the week ending 1st April.

The DAX30 rallied by 2.43%, with the CAC40 and the EuroStoxx600 gaining 1.91% and 1.23% respectively.

Impressive economic data from the Eurozone and beyond delivered support for the European majors in the week.

Adding to the upside was a further pickup in optimism towards the economic outlook for the U.S and beyond.

From the U.S, government spending plans also delivered plenty of support for the major boerses in the week.

For the Eurozone, in spite of vaccine shortages, the fact that manufacturing sector activity surged was good enough to mute concerns over new lockdown measures in France and other member states.

The Stats

Consumer spending, unemployment, manufacturing PMIs, and inflation figures were in focus.

It was a mixed set of numbers, though the stats were skewed to the positive in a shorted week.

While consumer spending fell in France, retail sales was on the rise in Germany.

Germany’s unemployment rate held steady following a further decline in the number of unemployed.

Providing strong support, however, were better than expect manufacturing PMI numbers.

With Italy and Spain seeing manufacturing sector activity pickup at a marked pace, the Eurozone’s PMI hit an all-time high 62.5.

Germany’s PMI also hit an all-time high 66.6 in March.

Mixed inflation figures had little impact on the majors in the week.

While the Eurozone’s annual core rate of inflation softened in March, the Eurozone’s annual rate of inflation accelerated at the end of the 1st quarter.

A marked pickup in inflationary pressures across member states was aligned with market expectations.

From the U.S

There were some key stats for the markets to consider.

In the 1st half of the week, consumer confidence and ADP nonfarm employment change figures delivered.

The CB consumer confidence index jumped from 90.4 to 109.7 in March.

Justifying improving consumer sentiment was a 517k rise in nonfarm employment, according to ADP figures.

In the 2nd half of the week, manufacturing PMI and labor market numbers were in focus.

The market’s preferred ISM Manufacturing PMI increased from 60.8 to 64.7 in March,

On Thursday, jobless claims disappointed, however, rising from 658k to 719k in the week ending 26th March.

The Market Movers

From the DAX, it was a bullish week for the auto sector. BMW and Volkswagen rallied by 5.91% and by 5.28% respectively. Continental and Daimler ended the week with more modest gains of 2.47% and 2.82% respectively.

It was a mixed week for the banking sector, however. Deutsche Bank slid by 2.01%, while Commerzbank rose by 0.38%.

From the CAC, it was a bullish week for the banks. BNP Paribas rose by 0.93%, with Credit Agricole and Soc Gen ending the week with gains of 1.72% and 1.98% respectively.

It was also a bullish week for the French auto sector. Renault and Stellantis NV rose by 4.29% and by 2.92% respectively.

Air France-KLM and Airbus also found strong support, gaining 2.92% and 2.81% respectively.

On the VIX Index

It was a 2nd consecutive week in the red for the VIX. Following on from a 9.98% decline from the previous week, the VIX fell by 8.11% to end the week at 17.33.

Three days in the red that included a 5.45% fall on Tuesday and a 10.67% slide on Thursday contributed to the downside in the week.

For the week through Thursday, the NASDAQ rallied by 2.60%, with the Dow and the S&P500 gaining by 0.24% and 1.14% respectively.

VIX 020421 Weekly Chart

The Week Ahead

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

After Monday’s holiday, Eurozone unemployment figures for February get things going. Barring particularly dire numbers, however, we don’t expect the numbers to influence.

The reintroduction of lockdown measures across a number of member states will likely impact labor market conditions in March.

On Wednesday, the focus will shift to service sector PMI figures from Italy and Spain.

Finalized service and composite PMIs for France, Germany, and the Eurozone are also due out.

Barring marked deviation from prelims, expect Italy and the Eurozone’s PMIs to garner the greatest interest.

Through the second half of the week, the German economy is back in focus.

German factory orders, industrial production, trade data for February are due out on Thursday and Friday.

Following an all-time high March Manufacturing PMI, the markets will be looking for the stats to be aligned with Germany’s survey-based numbers.

ISM Non-Manufacturing PMI, jobless claims, and wholesale inflation figures from the U.S will also be in focus.

Going into the week, U.S labor market numbers from Friday will likely set the tone.

From elsewhere, there are also service sector PMI numbers and inflation figures from China to consider in the week.

Away from the economic calendar, geopolitics and COVID-19 news updates will also continue to influence.

European Equities: Futures Point Northwards with a Busy Economic Calendar in Focus

Economic Calendar:

Thursday, 1st April

German Retail Sales (MoM) (Feb)

Spanish Manufacturing PMI (Mar)

Italian Manufacturing PMI (Mar)

French Manufacturing PMI (Mar) Final

German Manufacturing PMI (Mar) Final

Eurozone Manufacturing PMI (Mar) Final

The Majors

It was a mixed day for the European majors on Wednesday. The DAX30 ended the day flat, while the CAC40 and the EuroStoxx600 fell by 0.34% and by 0.24% respectively.

Economic data from China, the Eurozone, and the U.S were in focus throughout the day.

Away from the economic calendar, however, COVID-19 remained a concern but not enough to drag the majors into the deep red.

The Stats

It was a busy day on the economic calendar on Wednesday. French consumer spending, German unemployment, and Eurozone inflation figures were in focus.

French Consumer Spending

In the month of February, French consumer spending stalled, following a revised 4.9% slide in January. Economists had forecast a 2% increase.

According to Insee.Fr,

  • A 3.4% increase in the purchasing of manufactured goods was offset by a 3.1% fall in energy expenditure and a 2.2% decline in food consumption.
  • Durable goods consumption increased by 2.3%, with clothing and textiles purchases up 15.8%.
  • Milder temperatures contributed to a 3.5% fall in gas and electricity consumption. Fuel consumption fell by 2.5%.

French Inflation

Inflationary pressures were on the rise in March, according to prelim figures.

According to Insee.Fr, the annual rate of inflation accelerated from 0.6% to 1.1%, supported by a 0.6% increase in consumer prices, month-on-month.  Consumer prices had stalled in February.

German Unemployment

In March, unemployment fell by 8K, following on from a revised 36k slide in February. Economists had forecast a 13k fall.

Germany’s unemployment rate held steady at 6.0%, which was in line with forecasts.

Eurozone Inflation

According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 0.9% to 1.3%, which was in line with forecasts.

In March, Eurozone consumer prices increased by 0.9%, month-on-month, following a 0.2% rise in February.

Core inflationary pressures softened, however, with the core annual rate of inflation softening from 1.1% to 0.9%.

According to Eurostat,

  • Energy is expected to have the highest annual rate in March (4.3% compared with -1.7% in February).
  • Prices for services is expected to rise by 1.3% compared with a 1.2% increase in February.
  • For food, alcohol, & tobacco, however, prices are expected to rise by 1.1% compared with 1.3% in February.
  • Non-energy industrial goods are also expected to see prices rise at a slower pace in March, 0.3% compared with 1.0%.

Other stats included prelim inflation figures from Italy. These stats had limited impact, however, as the markets awaited the Eurozone’s figures.

From the U.S

Nonfarm payroll figures were in focus late in the European session.

In March, the ADP reported a 517K increase in nonfarm employment, falling marginally short of a forecasted 550k jump.

Chicago PMI figures for March had muted impact on the European majors late in the session. In March, the PMI increased from 59.5 to 66.3. Economists had forecast an increase to 60.7.

Ahead of the European Open

Private sector PMI figures from China set the tone ahead of the European open.

In March, the NBS Manufacturing PMI increased from 50.6 to 51.9, with the Non-Manufacturing PMI rising from 51.4 to 56.3.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. Volkswagen fell by 0.93% to buck the trend. BMW and Daimler rose by 0.42% and by 0.62% respectively. Continental ended the day up by a modest 0.09%.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 0.89% and by 1.54% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas fell by 1.42%, with Credit Agricole and Soc Gen seeing losses of 1.08% and 1.11% respectively.

It was also a bearish day for the French auto sector. Stellantis NV slipped by 0.11%, with Renault ended the day down by 1.90%.

Air France-KLM slid by 2.00%, with Airbus SE falling by 1.19%.

On the VIX Index

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

Following on from a 5.45% decline on Tuesday, the VIX fell by 1.07% to end the day at 19.40.

The NASDAQ and the S&P500 rose by 1.54% and by 0.36% respectively, while the Dow slipped by 0.26%.

VIX 010421 Daily Chart

The Day Ahead

It’s another busy prices day ahead on the European economic calendar. Manufacturing PMI figures for Italy and Spain are due out early in the European session.

Finalized PMIs for France, Germany, and the Eurozone are also due out.

Barring marked deviation from prelims, expect Italy and the Eurozone’s Manufacturing PMIs to have the greatest influence.

From the U.S, ISM Manufacturing PMI and weekly jobless claims figures will also be in focus.

Ahead of the European open, manufacturing sector PMI figures for March disappointed. The market’s preferred Caixin Manufacturing PMI fell from 50.9 to 50.6. The decline was modest, however, which limited the damage.

Away from the stats, expect increased sensitivity to any negative news updates on COVID-19 and any pick up in geopolitical risk.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 1 point, while the DAX was up by 19 points.

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

European Equities: A Month in Review – March 2021

The Majors

It was another bullish month for the European majors in March, following on from a February recovery from of January losses.

The DAX30 rallied by 8.86%, with the CAC40 and the EuroStoxx600 ending the month with gains of 6.38% and 6.08% respectively.

Impressive economic data and market sentiment towards the U.S economy drove demand for riskier assets.

Central bank chatter also delivered support as market angst over rising borrowing costs and a possible shift in monetary policy stance abated in the month.

Pegging the majors back late in the month, however, was a spike in new COVID-19 cases and a reintroduction of lockdown measures across some EU member states.

A lack of adequate vaccination supply saw tensions between the EU and the UK rise as AstraZeneca continued to deliver to the UK.

There was talk of banning vaccine exports from the EU ahead of an unscheduled EU Summit. The final decision, however, was to hold back from any ban while looking to push suppliers to meet EU orders.

In a busy month, there was also a build up in tension between China and the West over Xinjiang cotton and forced labor.

The Stats

It was a busy month on the Eurozone economic calendar and a particularly important one.

The effects of both fiscal and monetary policy support were evident in manufacturing sector activity in March.

Both Germany and the Eurozone’s manufacturing  PMIs hit record highs in the month as demand rebounded. An easing of lockdown measures supported the pickup in manufacturing sector activity late in the quarter.

While the services sector continued to contract at Eurozone level, Germany’s services sector returned to expansion in March.

Other key stats in the month included business and consumer confidence figures.

Both were on the rise off the back of hopes of an end to the COVID-19 pandemic and pickup economic activity.

In spite of this consumption remained in issue, with retail sales from Germany and consumer spending from France continuing to disappoint.

While consumption disappointed, prelim inflation figures for March continued to point to a pickup in inflationary pressures.

From the U.S

Economic data was also skewed to the positive in the month.

Key in the month were improving labor market conditions and a continued pickup in private sector activity.

For February, nonfarm payrolls increased by 379k, following a modest 166k increase in January. While the participation rate held steady at 61.4%, the unemployment rate eased from 6.3% to 6.2%.

Jobless claim figures were also pointing to an improvement in labor market conditions.

In the week ending 15th March, initial jobless claims fell to sub-700k levels for the first time since the March 2020 jump from sub-300k to 3,283k in the week ending 20th March 2020.

Initial jobless claims had hit an all-time high of 6,606k back in the week ending 2nd April 2020.

Improving labor market conditions supported a pickup in consumer confidence in the quarter.

The Michigan Consumer Sentiment Index increased from 76.8 to 84.9 in March, with the CB Consumer Confidence Index jumping from a January 88.9 to a March 109.7.

Other stats in the month delivered mixed results, however.

Personal spending fell by more than expected in February, with inflationary pressures also softening in the month.

With private sector activity accelerating, core durable goods and durable goods orders had a muted impact on the markets. This was also the case for factory order and trade data.

Even a larger than expected slide in retail sales failed to spook the markets in the month.

Monetary Policy

The stars were aligned for riskier assets, with the FED delivering assurances of an unwavering hold on policy. This came in spite of particularly bullish growth forecasts for 2021.

FED Chair Powell also delivered testimony and speeches in the month, maintaining his stance on monetary policy.

The ECB addressed concerns over rising borrowing costs by committing to a ramp up in government bond purchases. The promise supported the European majors in the month.

The Market Movers

For the DAX: It was a mixed month for the auto sector in March. Volkswagen surged by 37.96%, driven by updates on the firm’s EV targets.

BMW and Daimler also saw solid gains of 23.59% and 14.45% respectively. while Continental fell by 5.17%.

It was also a mixed month for the banks. Deutsche Bank ended the month flat, while Commerzbank fell by 3.68%.

From the CAC, it was another bullish month for the banking sector. BNP Paribas and Credit Agricole rose by 5.28% and by 6.37% respectively. Soc Gen led the way once more, however, rallying by 8.72%.

It was also a mixed month for the auto sector. Renault fell by 0.51%, while Stellantis NV ended the month up by 12.37%.

Air France-KLM struggled amidst the fresh spike in new COVID-19 cases, sliding by 8.60%, while Airbus SE rose by 0.66%.

On the VIX Index

It was a 2nd consecutive month in the red for the VIX in March, delivering a 4th monthly decline in 8-months. Following on from a 15.53% slide in February, the VIX tumbled by 30.59% to end the month at 19.40.

In March, the Dow rallied by 6.62%, with the NASDAQ and the S&P500 gaining 0.41% and 4.24% respectively.

VIX 010421 Monthly Chart

The Month Ahead

Going into the 2nd quarter, we can expect greater focus on the Eurozone economic calendar. While the markets will look for manufacturing sector activity to deliver, service sector conditions will also need to improve further.

The markets will also be looking for improved labor market conditions to support consumption and the services sector.

Much, however, will depend on the availability of COVID-19 vaccines and government plans on containing the virus.

From the U.S, nonfarm payrolls, service sector activity, spending, and consumer confidence will continue to remain key areas of focus.

Out of China, trade data and private sector PMIs will also provide direction.

On the monetary policy front, expect any further hawkish chatter to support the current trends. Any unexpectedly dovish chatter, however, would test the majors at current levels.

Away from the economic calendar, geopolitics will also influence. In particular, the markets will be looking the EU and the U.S to look to ease tensions with China.

Geopolitically, Iran’s nuclear agreement also remains in the spotlight.

European Equities: A Busy Economic Calendar and COVID-19 to Test the Majors

Economic Calendar:

Wednesday, 31st March

French Consumer Spending (MoM) (Feb)

French CPI (MoM) (Mar) Prelim

German Unemployment Change (Mar)

German Unemployment Rate (Mar)

Eurozone CPI (YoY) (Mar) Prelim

Thursday, 1st April

German Retail Sales (MoM) (Feb)

Spanish Manufacturing PMI (Mar)

Italian Manufacturing PMI (Mar)

French Manufacturing PMI (Mar) Final

German Manufacturing PMI (Mar) Final

Eurozone Manufacturing PMI (Mar) Final

The Majors

It was a bullish day for the European majors on Tuesday. The DAX30 and the CAC40 rallied by 1.29% and by 1.21% respectively, with the EuroStoxx600 rising by 0.71%.

A pickup in inflationary pressures and an upward trend on consumer confidence supported an optimistic outlook on the economic recovery.

The optimism came in spite of low vaccination rates across the Eurozone as a result of a limited of supply.

A pickup in consumer confidence in the U.S and EU member states including France that has reintroduced lockdown measures supported the upside on the day.

The Stats

It was a relatively quiet day on the economic calendar on Tuesday. Prelim inflation figures from Germany and Spain were in focus on the day.

German Inflation

In March, consumer prices rose by 0.5%, month-on-month, following a 0.7% increase in February. Economists had forecast a 0.5% rise.

According to Destatis,

  • Consumer prices were up by 1.7% on the same month a year earlier.
  • Prices for goods rose by 1.9%, with prices for energy increasing by 4.8%, and prices for food up by 1.6%.
  • According to prelim figures, prices for services increased by 1.6%.

Spain

Of less influence on the day were inflation figures from Spain.

In March, inflationary pressures returned, with consumer prices rising by 1.3%, year-on-year. In February, consumer prices had stalled.

The harmonized index for consumer prices increased by 1.2%, year-on-year. In February, the index had fallen by 0.1%. Economists had forecast a 0.9% rise.

From the U.S

Consumer confidence was in focus late in the European session.

In March, the CB Consumer Confidence Index jumped from a revised 90.4 to 109.7. Economists had forecast a rise to 96.9.

According to the March survey,

  • The Present Situation Index rose from 89.6 to 110.0, with the Expectations Index increasing from 90.9 to 109.6.
  • Consumer confidence increased to its highest level since the onset of the pandemic in March 2020.
  • Consumers’ assessment of current conditions and their short-term outlook improved significantly. This was an indication that economic growth is likely to strengthen further in the coming months.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Tuesday. BMW and Volkswagen rallied by 3.07% and by 3.81% respectively. Continental and Daimler saw more modest gains of 0.27% and 1.91% respectively.

It was also a bullish day for the banks. Deutsche Bank rose by 1.08%, with Commerzbank rallying by 3.27%.

From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen rallied by 3.85% and by 3.96% respectively. Credit Agricole ended the day up by 2.72%.

It was also a bullish day for the French auto sector. Stellantis NV and Renault ended the day with gains of 2.99% and 3.32% respective.

Air France-KLM also found strong support, rallying by 3.75%, while Airbus SE eked out an 0.31% gain on the day.

On the VIX Index

It was back into the red for the VIX on Tuesday, marking a 3rd day in the red from 4 sessions.

Partially reversing a 9.97% gain from Monday, the VIX fell by 5.45% to end the day at 19.61.

The Dow and the S&P500 fell by 0.31% and by 0.32% respectively, with the NASDAQ declining by 0.11%.

VIX 310321 Daily Chart

The Day Ahead

It’s a relatively busy day ahead on the European economic calendar. French consumer spending and German unemployment figures are due out early in the day.

With France reintroducing lockdown measures any marked pickup in spending will likely have a muted impact on the majors.

Germany’s unemployment figures should therefore have the greatest impact on the majors.

Other stats from the Eurozone include French, Italian, and Eurozone inflation figures. Eurozone figures will garner the greatest interest..

From the U.S, ADP nonfarm employment change and Chicago PMI figures for March will also draw attention.

Ahead of the European open, NBS private sector PMI numbers from China will set the tone.

Away from the economic calendar, COVID-19 and geopolitics will also need considering.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 15 points.

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

European Equities: German Inflation, U.S Consumer Confidence, and COVID-19 in Focus

Economic Calendar:

Tuesday, 30th March

Spanish HICP (YoY) (Mar) Prelim

German CPI (MoM) (Mar) Prelim

Wednesday, 31st March

French Consumer Spending (MoM) (Feb)

German Unemployment Change (Mar)

German Unemployment Rate (Mar)

Eurozone CPI (YoY) (Mar) Prelim

Thursday, 1st April

German Retail Sales (MoM) (Feb)

Spanish Manufacturing PMI (Mar)

Italian Manufacturing PMI (Mar)

French Manufacturing PMI (Mar) Final

German Manufacturing PMI (Mar) Final

Eurozone Manufacturing PMI (Mar) Final

The Majors

It was a relatively bullish start to the week for the European majors on Monday. The DAX30 and CAC40 rose by 0.47% and by 0.45% respectively, with the EuroStoxx600 gaining 0.15%.

There were no material stats from the Eurozone or the U.S to provide the majors with direction.

COVID-19 news updates continued to weigh on the majors with Germany talking of a possible need to reintroduce containment measures. The news followed Chancellor Merkel’s decision to U-turn on lockdown measures last week.

Through the early part of the day, the European markets also reacted to news of hedge fund Archegos defaulting on margin calls. Warnings of significant losses across the banking sector pegged the majors back.

The Stats

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

From the U.S

It was also a particularly quiet day on the U.S economic calendar, with no major stats from the U.S to influence.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Monday. BMW and Volkswagen rose by 1.90% and 1.71% respectively. Continental and Daimler saw relatively modest gains of 0.76% and 0.83% respectively.

It was a bearish day for the banks, however. Deutsche Bank slid by 2.52%, with Commerzbank falling by 1.42%.

From the CAC, it was a bearish day for the banks. BNP Paribas and Soc Gen slid by 1.94% and by 2.41% respectively, with Credit Agricole declining 0.69%.

It was a relatively bullish day for the French auto sector, however. Stellantis NV and Renault ended the day with modest gains of 0.10% and 0.16% respectively.

Air France-KLM rose by 0.36%, while Airbus SE slipped by 0.29% on the day.

On the VIX Index

It was back in the green for the VIX on Monday, following two consecutive days in the red.

Reversing a 4.80% fall from Friday, the VIX rose by 9.97% to end the day at 20.74.

The Dow rose by 0.30%, while the NASDAQ and the S&P500 fell by 0.60% and 0.09% respectively.

VIX 300321 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the European economic calendar. Prelim inflation figures from Spain and Germany will be in focus.

Barring a marked pickup in inflationary pressures, however, the stats are unlikely to have a material influence on the majors.

From the U.S, consumer confidence figures due out late in the European session will provide direction, however.

Away from the economic calendar, COVID-19 and COVID-19 vaccine news will need monitoring. There’s also any further talk of financial losses over the Archegos Fund to consider.

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.

European Equities: A Week in Review – 26/03/21

The Majors

It was another mixed week for the European majors in the week ending 26th March.

The DAX30 and EuroStoxx600 ended the week gains of 0.88% and 0.85% respectively, while the CAC40 fell by 0.15%.

Impressive economic data provided the European majors with support in the week.

Germany and the Eurozone’s manufacturing PMIs hit record highs in March, according to prelim figures.

Optimism towards the U.S economy and progress on Biden’s vaccination pledge were also positives for the markets.

A fresh spike in new COVID-19 cases pegged the European majors back, however, and left the CAC40 in the red for the week.

While German Chancellor Angela Merkel took an about turn on an Easter lockdown, the French government reintroduced new containment measures in the week.

Other EU member states were also forced to introduce containment measures, raising uncertainty over the economic outlook.

From the ECB, the ECB’s Economic Bulletin also raised concerns over the possible negative impact of new containment measures on the economic recovery.

The Stats

It was a busy week on the economic data front.

Private sector PMIs and German consumer and business sentiment figures were on focus.

It was an impressive set of numbers from Eurozone member states.

The Eurozone’s Services PMI increased from 45.7 to a 7-month high 48.8 in March, according to prelim figures versus a forecasted 46.0.

In March, the Eurozone’s Manufacturing PMI rose from 57.9 to a record high 62.4 versus a forecasted 57.7.

The pickup in the Eurozone PMI numbers came off the back of a marked pickup in private sector PMI numbers from France and Germany.

Germany’s manufacturing PMI jumped from 60.7 to a record high 66.6, with the services sector returning to growth.

German Consumer and Business Confidence

For April, Germany’s GfK Consumer Climate Index rose from -12.7 to -6.2.

A marked increase in income expectations, which hit a 12-month high, supported the jump in the headline figure.

On the business front, Germany’s IFO Business Climate Index increased from a revised 92.7 to 96.6.

Supporting the uptick in the headline figures was a jump in the business expectations sub-index from a revised 94.2 to 100.4.

The current assessment sub-index was also on the rise, increasing from 90.6 to 90.3.

ECB Economic Bulletin

Salient points from the ECB Economic Bulletin included:

  • While the overall economic situation is expected to improve over 2021, uncertainties near-term remain.
  • Persistently high infection rates, the spread of the virus mutations, and the associated and tightening of containment measures are weighing on euro area economic activity in the short term.
  • Looking ahead, the ongoing vaccination campaigns, together with the envisaged gradual relaxation of containment measures, underpin the expectation of a firm rebound in economic activity this year.
  • Other areas of focus include inflation and trade, both of which were favorable for riskier assets.
  • While the ECB saw a pickup in near-term inflationary pressures, the longer-term outlook was for a softening.
  • Trade terms were viewed as positive, supported by a marked pickup in manufacturing sector activity in Q42020.
  • The Euro area labor market continues to benefit from significant policy support.
  • Consumer spending lost momentum around the turn of the year. While household savings have been on the rise, households’ expectations for the next 12-months vis-à-vis the general economic situation, their personal financial situation, and their plans to make major purchases have not improved significantly since May 2020.
  • The recent intensification of the COVID-19 pandemic has weakened the short-term outlook for the euro economy. It has not derailed its recovery, however.

From the U.S

Prelim private sector PMIs for March were market positive, with the service PMI rising from 59.8 to 60.0. The Manufacturing PMI increased from 58.6 to 59.0.

Core durable goods orders disappointed, however, falling by 0.9% in February.

On Thursday, jobless claims figures provided riskier assets with support. In the week ending 19th February, initial jobless claims fell from 781k to 684k. This was the first time claims had fallen to sub-700k levels since the start of the pandemic.

At the end of the week, the stats were skewed to the negative, however.

Inflationary pressures softened, with the Core PCE Price Index rising by 1.4% year-on-year in February. In January, the index had risen by 1.5%.

Personal spending slid by 1% in February, partially reversing a 3.4% jump from January.

Other stats included trade data and finalized consumer sentiment figures that had a muted impact on the Dollar.

On the monetary policy front, FED Chair Powell testimony also delivered Dollar support in the week.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Volkswagen and BMW rose by 1.51% and by 1.61% respectively. Continental slid by 7.01%, however, with Daimler ending the week down by 0.24%.

It was a bearish week for the banking sector. Deutsche Bank and Commerzbank fell by 1.51% and by 1.69% respectively.

From the CAC, it was a bullish week for the banks. BNP Paribas rose by 1.02%, with Credit Agricole and Soc Gen gaining 0.99% and 0.32% respectively.

It was another bearish week for the French auto sector, however. Renault and Stellantis NV ended the week with losses of 0.96% and 6.21% respectively.

Air France-KLM fell by 2.27%, while Airbus gained a modest 0.35%.

On the VIX Index

It was a back into the red for the VIX in the week ending 26th March. Reversing a 1.26% gain from the previous week, the VIX fell by 9.98% to end the week at 18.86.

Three days in the red that included a 9.88% fall on Monday contributed to the downside in the week.

For the week, the NASDAQ fell by 0.58%, while the Dow and the S&P500 rose by 1.36% and by 1.57% respectively.

VIX 270321 Weekly Chart

The Week Ahead

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

French and German consumer spending and German unemployment figures are due out in the week ahead.

Expect Germany’s stats to have a greater impact on the EUR. With France having reintroduced lockdown measures, the markets will likely brush aside any positive numbers from France.

Late in the week, manufacturing PMI numbers for Italy and Spain will also draw attention along with finalized PMI for France, Germany, and the Eurozone.

Barring marked revisions, expect Italy and the Eurozone’s PMIs to have the greatest impact, however.

From the U.S, consumer confidence, ADP nonfarm employment change, and ISM Manufacturing PMI numbers are also in focus.

Nonfarm payroll and unemployment numbers are also due out, though the European markets will need to wait until Monday to respond.

From elsewhere, private sector PMI numbers from China will also provide direction to the broader markets.

On the geopolitical risk front, U.S – China tensions and EU – Britain tensions will  need monitoring. For the Eurozone, COVID-19 news will also be key in the week. Further lockdown measures would likely test support levels.

European Equities: German Business Sentiment and COVID-19 News in Focus

Economic Calendar:

Friday, 26th March

Spanish GDP (QoQ) (Q4)

German Ifo Business Climate Index (Mar)

The Majors

It was another mixed day for the European majors on Thursday. The DAX30 and the CAC40 rose by 0.08% and by 0.09% respectively, while the EuroStoxx600 slipped by 0.14%.

Positive economic data from Germany and the U.S failed to kick start a rally on Thursday.

COVID-19 continued to peg the majors back in spite of Germany’s U-turn on an Easter lockdown.

A fresh spike in new COVID-19 cases across Germany had seen the DAX30 deep in the red before finding support.

The latest rise in new COVID-19 cases coincided with the release of the ECB’s Economic Bulletin. The Bulletin highlighted the ECB’s concerns over the impact of a 3rd wave on the economic recovery.

The Stats

It was a relatively busy day on the economic calendar on Thursday. On the economic data front, German consumer confidence figures were in focus early in the day.

Consumer Sentiment

For April, the GfK Consumer Climate Index increased from a revised -12.7 to -6.2. Economists had forecast an increase to -11.9.

According to the GFK survey,

  • The easing of hard lockdown, which started in early March, as well as a downward trend in infection rates supported consumer confidence.
  • In terms of timing, the survey was conducted between 4th and 15th March, before Germany’s initial announcement of fresh lockdown measures.
  • A sharp increase in new COVID-19 cases and issues surrounding the AstraZeneca vaccine had a muted impact on sentiment.

Looking at the individual components of the survey,

  • Income expectations hit a 12-month high, with the indicator jumping by 15.8 points to 22.3 points.
  • Propensity to buy followed rising income expectations, with the indicator rising by 4.9 points to 12.3 points. This remains 19 points below the previous year’s level.
  • The economic expectations indicator rose by 9.7 points to 17.7, its highest level since September 2020.

Later in the session, the ECB Economic Bulletin also drew interest.

The ECB Economic Bulletin

Salient points from the ECB Economic Bulletin included:

  • While the overall economic situation is expected to improve over 2021, uncertainties near-term remain.
  • Persistently high infection rates, the spread of the virus mutations, and the associated and tightening of containment measures are weighing on euro area economic activity in the short term.
  • Looking ahead, the ongoing vaccination campaigns, together with the envisaged gradual relaxation of containment measures, underpin the expectation of a firm rebound in economic activity this year.
  • Other areas of focus include inflation and trade, both of which were favorable for riskier assets.
  • While the ECB saw a pickup in near-term inflationary pressures, the longer-term outlook was for a softening early next year.
  • Trade terms were viewed as positive, supported by a marked pickup in manufacturing sector activity in Q42020.
  • The Euro area labor market continues to benefit from significant policy support.
  • Consumer spending lost momentum around the turn of the year. While household savings have been on the rise, households’ expectations for the next 12-months vis-à-vis the general economic situation, their personal financial situation, and their plans to make major purchases have not improved significantly since May 2020.
  • The recent intensification of the COVID-19 pandemic has weakened the short-term outlook for the euro economy. It has not derailed its recovery, however.

From the U.S

It was also a relatively busy day. Key stats included the weekly jobless claims and finalized GDP numbers for Q42020.

In the week ending 19th March, initial jobless claims fell from an upwardly revised 781k to 684k. Economists had forecast a fall to 730k. It was the first time that initial jobless claims had fallen below 700k since the jump to 3,283k in the week ending March 20th, 2020.

Of less influence were the GDP numbers, following the FED’s bullish outlook on the economic recovery.

In the 4th quarter, the U.S economy grew by 4.3%, revised up from a previous estimate 4.1%. In the 3rd quarter, the economy had expanded by 33.4%.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Thursday. Volkswagen rallied by 3.81%, with BMW and Daimler rising by 2.09% and 1.70% respectively. Continental saw a more modest 0.81% gain on the day.

It was a bearish day for the banks, however. Deutsche Bank and Commerzbank fell by 0.44% and by 2.46% respectively.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole fell by 0.57% and by 0.17% respectively, with Soc Gen declining by 1.20%.

It was a mixed day for the French auto sector, however. Stellantis NV rose by 2.55%, while Renault ended the day with a loss of 0.80%.

Air France-KLM declined by 1.44%, while Airbus SE rose by 0.54% on the day.

On the VIX Index

It was back into the red for the VIX on Thursday, marking an 11th fall from 15 sessions.

Reversing a 4.43% rise from Wednesday, the VIX fell by 6.56% to end the day at 19.81.

The NASDAQ rose by 0.12%, with the Dow and the S&P500 gaining by 0.62% and 0.52% respectively.

VIX 260321 Daily Chart

The Day Ahead

It’s a relatively busy day ahead on the European economic calendar. German business sentiment and 4th quarter GDP numbers from Spain are due out later today.

Germany’s business sentiment figures for March will garner plenty of interest.

From the U.S, inflation and personal spending numbers for February will also influence later in the session.

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

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 21 points.

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

European Equities: German Consumer Confidence and the ECB in Focus

Economic Calendar:

Thursday, 25th March

GfK German Consumer Climate (Apr)

ECB Economic Bulletin

ECB President Lagarde Speaks

Friday, 26th March

Spanish GDP (QoQ) (Q4)

German Ifo Business Climate Index (Mar)

The Majors

It was a mixed day for the European majors on Wednesday. The DAX30 fell by 0.35%, while the CAC40 and the EuroStoxx600 rose by 0.03% and by 0.02% respectively.

Impressive manufacturing PMI figures and better than expected service PMI figures from the Eurozone failed to deliver support.

With both France and Germany reintroducing lockdown measures, concerns over the economic outlook overshadowed a pickup in private sector activity in March.

The Stats

It was a particularly busy day on the economic calendar on Wednesday. Private sector PMIs for France, Germany, and the Eurozone and Eurozone consumer confidence figures were in focus.

France

According to the prelim survey, the French Manufacturing PMI rose from 56.1 to a 39-month high 58.8 in March. Economists had forecast a rise to 56.5.

The services PMI increased from 45.6 to a 3-month high 47.8, which was better than a forecasted decline to 45.5.

Germany

Manufacturing sector continued to impress in March, with the PMI rising from 60.7 to a record high 66.6. Economists had forecast an increased to 60.8.

The services sector returned to expansion, with the PMI rising from 45.7 to a 7-month high 50.8. Economists had forecast an increased to 46.2.

The Eurozone

The Services PMI increased from 45.7 to a 7-month high 48.8 in March, according to prelim figures versus a forecasted 46.0.

In March, the Manufacturing PMI rose from 57.9 to a record high 62.4 versus a forecasted 57.7.

According to the prelim survey,

  • The composite PMI increased from 48.8 to 52.5, coming in ahead of a forecasted 49.1.
  • As a result of a marked pick up in manufacturing sector activity, Composite PMI hit an 8-month high in March.
  • While manufacturing sector output increased by a survey record, however, service sector activity continued to be hit by the COVID-19 pandemic.
  • Manufacturers saw headcounts rise at a rate not seen since Aug-2018. Across the services sector, however, the rate of job creation was far more modest, though the largest since the start of the pandemic.
  • For the private sector as a whole, new business returned to growth over the Eurozone.
  • Export orders rose sharply, largely attributed to an unprecedented increase in manufacturing.

Consumer Confidence

According to the EU Commission, the flash consumer confidence indicator for the Euro area rose by 4 points to -10.8 for March. The increase took the indicator above its long-term average of -11.1.

From the U.S

It was a relatively busy day. Key stats included core durable goods orders and prelim private sector PMI numbers for March.

The stats were mixed, with core durable goods and durable goods orders disappointing.

In February, durable goods orders fell by 1.1%, with core durable goods orders declining by 0.9%. Economists had forecast increases of 0.8% and 0.6% respectively after upward revisions to January numbers.

Private sector activity saw a marginal pickup in March, however, according to prelim figures.

The Manufacturing PMI increased from 58.6 to 59.0, with the Services PMI rising from 59.8 to 60.0.

Economists had forecast increases to 59.3 and to 60.0 respectively.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. Volkswagen slid by 3.01%, with Continental and Daimler falling by 1.77% and 1.86% respectively. BMW saw a more modest 1.37% loss on the day.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank rose by 1.41% and by 1.59% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole rose by 1.51% and by 1.22% respectively, with Soc Gen gaining 0.39%.

It was relatively flat day for the French auto sector. Stellantis NV and Renault ended the day with modest gains of 0.03% and 0.08% respectively.

Air France-KLM rallied by 2.95%, with Airbus SE gaining 0.80% on the day.

On the VIX Index

It was a 2nd consecutive day in the green for the VIX on Wednesday, marking a 4th gain from 14 sessions.

Following on from a 7.52% rise on Tuesday, the VIX rose by 4.43% to end the day at 21.20.

The NASDAQ slid by 2.01%, with the Dow and the S&P500 declining by 0.01% and by 0.55% respectively.

VIX 250321 Daily Chart

The Day Ahead

It’s a relatively busy day ahead on the European economic calendar. German consumer confidence figures for April are due out going into the European open.

Later this morning, the focus will then shift to the ECB. The ECB Economic Bulletin is due out ahead of a scheduled ECB President Lagarde speech.

Low vaccination rates across member states and a fresh spike of new COVID-19 cases will remain a concern. Any negative chatter will further test support for the majors.

From the U.S, weekly jobless claims figures for the week ending 19th March will also be in focus.

Other stats include finalized 4th quarter GDP numbers from the U.S. These are unlikely to have a material impact on the markets following FED’s optimistic economic outlook.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 53 points, while the DAX was down by 37 points.

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