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

Economic Calendar:

Thursday, 27th May 2021

GfK German Consumer Climate (Jun)

Friday, 28th May 2021

French Consumer Spending (MoM) (Apr)

French GDP (QoQ) (Q1) Final

French CPI m/m (May) Prelim

French HICP m/m (May) Prelim

The Majors

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

The the DAX30 slipped by 0.09%, while the CAC40 and EuroStoxx600 eked out gains of 0.02% and 0.03% respectively.

With economic data on the lighter side, chatter from FOMC members of a willingness to begin considering a tapering to the asset purchasing program pegged the majors back.

In contrast, however, assurances from the ECB that it’s too early to begin considering any such tapering delivered support.

A pickup in both French business and consumer confidence added support for the CAC40.

The Stats

Economic data from the Eurozone included business and consumer confidence figures from France.

The Business Climate Survey Indicator for manufacturing rose from 104 to 107 in May. Economists had forecast an increase to 106.0.

According to Insee.Fr,

  • The increase was attributed to a rise in the balances of opinion on production prospects and order books.
  • Across the services sector, the business climate index climbed from 92 to 107.
  • For the retail sector, the climb was a more impressive 17 points to 107. The jump was driven by sentiment towards the near future, likely to be due to the reopening of the economy.
  • Employment conditions also improved, with the employment climate rising from 92 to 100.

Consumer confidence also improved, with the consumer confidence indicator rising from 95 to 97 in May. Economists had forecast an increase to 97.

According to Insee.Fr,

  • Household confidence in the economic situation remained below its long-term average of 100.
  • In relation to their future financial situation, the households’ opinion balance rose by 3 points to go above its long run average.
  • The share of households considering it to be a suitable time to make major purchases remained steady and remained above its long-term average.
  • In relation to households considering it a suitable time to save, the share declined after hitting an all-time high in April.

From the U.S

There were no material stats to provide the European majors with direction late in the day.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Wednesday. Daimler rose by 1.10% to lead the way, with BMW and Continental up by 0.67% and by 0.47% respectively. Volkswagen ended the day with a more modest 0.18% gain.

It was a mixed day for the banks. Deutsche Bank rose by 0.53%, while Commerzbank slid by 2.21%.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole ended the day down by 1.35% and by 1.14% respectively. Soc Gen led the way down, however, falling by 2,12%.

It was a relatively bullish day for the French auto sector, however. Stellantis NV and Renault ended the day with gains of 0.01% and 0.65% respectively.

Air France-KLM fell by 1.33%, while Airbus SE rose by 0.55%.

On the VIX Index

It was back into the red for the VIX on Wednesday, marking a 4th day in the red from 5 sessions.

Reversing a 2.39% rise from Tuesday, the VIX fell by 7.91% to end the day at 17.35.

The NASDAQ rose by 0.59%, with the Dow and the S&P500 ending the day with modest gains of 0.03% and by 0.19% respectively.

VIX 270521 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the European economic calendar. From the Eurozone, German consumer sentiment figures are due out ahead of the European open.

Following the pickup in business sentiment, the markets will be looking for consumer confidence to support a positive outlook on spending.

From the U.S, 2nd estimate GDP, core durable goods, and the weekly jobless claims figures will also provide direction later in the day.

On the monetary policy front, chatter from central bankers will also need continued monitoring.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 8 points.

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