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European Equities: Another Quiet Day on the Calendar Leaves COVID-19 and Earnings in Focus

Economic Calendar:

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 particularly bearish day for the European majors on Tuesday.

Following a mixed session on Monday, the CAC40 and the EuroStoxx600 slid by 2.09% and by 1.90% respectively. The DAX30 ended the day with a 1.55% loss.

A continued rise in new COVID-19 cases, in spite of ongoing vaccination programs, tested market optimism on the day.  A pullback in the U.S markets added to the downside for the European majors.

A lack of stats from the U.S late in the session gave the markets little else to consider as governments continue to struggle with the pandemic.

The Stats

It was a quiet day on the economic calendar on Tuesday.

German wholesale inflation figures were in focus early in the European session.

In March, Germany’s producer price index rose by 0.9% month-on-month, following a 0.7% rise in February. Economists had forecast a 0.6% increase.

Compared with the same month a year earlier, producer prices of industrial products were up by 3.7%. This was the highest increase when compared with the corresponding month of the preceding year since Nov-2011.

According to Destatis,

  • Prices of energy and prices of intermediate products drive the index northwards year-on-year.
  • Energy prices jumped by 8.0% compared with Mar-2020, with prices of intermediate goods up 5.7%.
  • Prices of durable consumer goods increased by a more modest 1.4% and capital goods by 0.9% compared with Mar-2020.
  • As a result of a 20.8% slide in prices for pork, food prices fell by 2.5% that dragged prices of non-durable consumer goods down by 1.4% year-on-year.

From the U.S

It was another particularly quiet day, with no major stats to provide the majors with direction late in the day.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Tuesday. Daimler and BMW slid by 2.68% and by 2.01% respectively. Continental and Volkswagen weren’t far behind, with losses of 1.77% and 1.91% respectively.

It was also a bearish day for the banks. Deutsche Bank slid by 3.94%, with Commerzbank tumbling by 4.78%.

From the CAC, it was a bearish day for the banks. BNP Paribas and Soc Gen slid by 4.69% and by 4.57% respectively, with Credit Agricole falling by 2.97%.

The French auto sector also struggled. Stellantis NV and Renault ended the day down by 4.04% and by 4.51% respectively.

Air France-KLM slumped by 6.10%, with Airbus SE sliding by 4.63%.

On the VIX Index

It was a 2nd consecutive day in the green for the VIX on Tuesday, marking a 4th daily gain in 10-sessions.

Following on from a 6.40% rise on Monday, the VIX increased by 8.04% to end the day at 18.68.

The Dow and the S&P500 fell by 0.75% and by 0.68% respectively, with the NASDAQ declining by 0.98%.

VIX 210421 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 majors with direction.

From the U.S, there are also no major stats due out to provide the majors with direction late in the session.

A lack of stats will continue to leave the majors in the hands of geopolitics and COVID-19 news updates.

On the corporate earnings front, Renault and Nestle are due to release results tomorrow…

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 3 points.

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