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

Economic Calendar:

Thursday, 6th May 2021

German Factory Orders (MoM) (Mar)

IHS Markit Construction PMI (Apr)

Eurozone Retail Sales (MoM) (Mar)

Friday, 7th May 2021

German Industrial Production (MoM) (Mar)

German Trade Balance (Mar)

ECB President Lagarde Speech

The Majors

It was a bullish day for the European majors on Wednesday, which were on the rebound from Tuesday’s pullback. The DAX30 rallied by 2.12%, with the CAC40 and the EuroStoxx600 ending the day up by 1.40% and by 1.82% respectively.

Corporate earnings, economic data, and a pickup in vaccination rates across the EU supported the more optimistic economic outlook.

With the EU making progress on the vaccination front, plans across the EU to reopen borders this summer also delivered a boost.

The Stats

It was a particularly busy day on the economic calendar. Service sector PMI figures for Italy and Spain were in focus early in the session.

Finalized services and composite PMIs from France, Germany, and the Eurozone also drew attention.

In April, Spain’s services PMI rose from 48.1 to 54.6, while Italy’s services PMI slipped from 48.6 to 47.3.

Economists had forecast PMIs of 50.0 and 49.8 respectively.

From France, the services PMI rose from 47.9 to 50.3, which was down from a prelim 50.4.

Germany’s services PMI fell from 50.8 to 49.9, which was down from a prelim 50.1.

The Eurozone

For the Eurozone, the Services PMI rose from 49.6 to 50.5, which was up from a prelim 50.3. As a result, the composite PMI increased from 53.2 to 53.8, which was up from a prelim 53.7.

According to the finalized Markit Composite Survey,

  • The latest data from the private sector indicated the fastest expansion since July and the second best in over two-and-a-half years.
  • Goods producers continued to lead the way, with output rising at a rate little changed from March’s record.
  • Service sector output returned to growth following 7-months of continuous contraction.
  • Germany led the way again in terms of overall growth, supported by strong manufacturing sector growth.
  • A jump in service sector activity in Spain saw private sector growth at its strongest in over 2-years.
  • Growth in both France and Italy was modest in April, while growth in France was the best in the past 8-months.

The Details

  • New orders across the private sector rose at the most marked pace in over two-and-a-half years.
  • Firms reported higher sales in both domestic and international markets.
  • The rate of backlog growth was the sharpest for 39-months and supported a pickup in hiring.
  • Firms increased staffing levels to the strongest degree for 2-years.
  • Optimism across the private sector reached its highest since composite data were first available in mid-2012.

From the U.S

It was a busy day, with ADP nonfarm employment change and service sector PMIs in focus late in the European session.

In April, nonfarm payrolls increased by 742k according to the ADP, which was up from 517k in March. Economists had forecast a rise of 800k.

From the services sector, the ISM Non-Manufacturing PMI slipped from 63.7 to 62.7, coming up short of a forecasted 64.3.

Finalized Markit survey services and composite PMIs for April were also out but had a muted impact on the majors.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Wednesday. Daimler rallied by 2.57%, with BMW and Volkswagen gaining 1.25% and 1.55% respectively. Continental bucked the trend, however, falling by 0.20%.

It was a bullish day for the banks. Deutsche Bank rose by 1.89%, with Commerzbank ended the day up by 0.78%.

From the CAC, it was a bullish day for the banks. BNP Paribas rallied by 3.49%, with Credit Agricole and Soc Gen gaining 1.95% and 1.87% respectively.

It was also a bullish day for the French auto sector. Stellantis NV jumped by 7.25% off the back of better-than-expected earnings results. Renault ended the day up by 3.13%.

Air France-KLM fell by 1.72%, with Airbus SE slipping by 0.17%.

On the VIX Index

It was back into the red for the VIX on Wednesday, marking a 2nd daily loss in 5-sessions.

Partially reversing a 6.39% gain from Tuesday, the VIX fell by 1.69% to end the day at 19.15.

The NASDAQ fell by 0.37%, while the Dow and the S&P500 saw gains of 0.29% and 0.07% respectively.

VIX 060521 Daily Chart

The Day Ahead

It’s a relatively busy day ahead on the European economic data front. Key stats include German factory orders and Eurozone retail sales figures.

Expect March factory orders from Germany to have a greater impact on the European majors.

From the U.S, weekly jobless claims figures will also provide direction later in the session.

The Futures

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

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

European Equities: Private Sector PMIs and ADP Nonfarm Figures in Focus

Economic Calendar:

Wednesday, 5th May 2021

Spanish Services PMI (Apr)

Italian Services PMI (Apr)

French Services PMI (Apr) Final

German Services PMI (Apr) Final

Eurozone Markit Composite PMI (Apr) Final

Eurozone Services PMI (Apr) Final

Thursday, 6th May 2021

German Factory Orders (MoM) (Mar)

IHS Markit Construction PMI (Apr)

Eurozone Retail Sales (MoM) (Mar)

Friday, 7th May 2021

German Industrial Production (MoM) (Mar)

German Trade Balance (Mar)

ECB President Lagarde Speech

The Majors

It was a particularly bearish day for the European majors on Tuesday. The DAX30 slid by 2.49%, with the CAC40 and the EuroStoxx600 ending the day down by 0.89% and by 1.43% respectively.

With no material stats from the Eurozone to provide direction on the day, a tech sector sell-off weighed on the European majors. Following Monday’s pullback, the NASDAQ continued to fall back on Tuesday, dragging tech stocks in Europe into the red.

News of anticipated supply shortages in the auto sector weighed heavily on the DAX30 in particular, with the auto sector joining tech stocks in the deep red.

The Stats

It was a particularly quiet day on the economic calendar, with no material stats from the Eurozone to provide direction.

From the U.S

It was a relatively busy day, with factory orders and trade data for March in focus late in the European session.

Factory orders increased by 1.1%, following a 0.5% decline in February. Economists had forecast a 1.3% rise.

The trade deficit widened from $70.4bn to $74.4bn in March. Economists had forecast a widening to $74.50bn.

The Market Movers

For the DAX: It was a particularly bearish day for the auto sector on Tuesday. Daimler tumbled by 5.20%, with BMW and Volkswagen sliding by 3.08% and by 3.94% respectively. Continental saw a more modest 1.03% loss on the day.

It was another mixed day for the banks. Deutsche Bank slid by a further 2.49%, while Commerzbank ended the day up by 0.52%.

From the CAC, it was a bearish day for the banks. Soc Gen slid by 2.23%, with BNP Paribas and Credit Agricole falling by 0.77% and by 1.15% respectively.

It was also a bearish day for the French auto sector. Stellantis NV and Renault ended the day with losses of 0.52% and 2.02% respectively.

Air France-KLM fell by 1.19%, with Airbus SE sliding by 3.18%.

On the VIX Index

It was back into the green for the VIX on Tuesday, marking a 3rd rise in 4-sessions.

Reversing a 1.61% fall from Monday, the VIX rose by 6.39% to end the day at 19.48.

The NASDAQ and the S&P500 fell by 1.88% and by 0.67% respectively, while the Dow eked out a 0.06% gain.

VIX 050521 Monthly Chart

The Day Ahead

It’s a busy day ahead on the European economic calendar. Key stats include service sector PMIs from Italy and Spain. Finalized numbers for Germany, France, and the Eurozone are also due out.

Barring any marked revisions from prelim figures, Italy and the Eurozone’s PMIs will draw the greatest interest.

From the U.S, ADP nonfarm employment change and the market’s favored ISM Non-Manufacturing PMI will also influence later in the day.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 61 points, with the DAX up by 117 points.

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

European Equities: Futures Point to the Red with No Major Stats from the Eurozone to Consider

Economic Calendar:

Wednesday, 5th May 2021

Spanish Services PMI (Apr)

Italian Services PMI (Apr)

French Services PMI (Apr) Final

German Services PMI (Apr) Final

Eurozone Markit Composite PMI (Apr) Final

Eurozone Services PMI (Apr) Final

Thursday, 6th May 2021

German Factory Orders (MoM) (Mar)

IHS Markit Construction PMI (Apr)

Eurozone Retail Sales (MoM) (Mar)

Friday, 7th May 2021

German Industrial Production (MoM) (Mar)

German Trade Balance (Mar)

ECB President Lagarde Speech

The Majors

It was a bullish start to the week for the European majors on Monday. The CAC40 and the DAX30 rose by 0.61% and by 0.66% respectively, with EuroStoxx600 ending the day up by 0.58%.

Economic data from the Eurozone delivered the European majors with support through the early part of the session.

From the U.S, stats were market negative, however, limiting the upside on the day.

The Stats

It was a busy day on the economic calendar on Monday. Manufacturing PMI figures for Italy and Spain were in focus along with finalized PMIs for France, Germany, and the Eurozone. German retail sales also drew attention ahead of the European open.

German Retail Sales

In March, retail sales jumped by 7.7% month-on-month, following an upwardly revised 2.7% increase in February.

According to Destatis,

  • Compared to the pre-crisis month of February 2020, retail sales were up by 4.4%.
  • Year-on-year, retail sales was up by 11.0%, which was the strongest year-on-year increase since records began back in 1994.

Member State Manufacturing PMIs

Spain’s Manufacturing PMI rose from 56.9 to 57.7 in April, with Italy’s Manufacturing PMI increasing from 59.8 to 60.7. Economists had forecast PMIs of 59.0 and 61.0 respectively.

From France, the Manufacturing PMI declined from 59.3 to 58.9, which was down from a prelim 59.2.

Germany’s Manufacturing PMI fell from 66.6 to 66.2 which was down from a prelim 66.4.

The Eurozone

The Manufacturing PMI rose from 62.5 to 62.9 in April. This was down from a prelim 63.3.

According to the Markit Survey,

  • Operating conditions improved at a rate that surpassed March’s survey record.
  • Growth was broad-based, with both the investment and intermediate goods categories registering considerable gains.
  • Importantly, manufacturers of investment goods recorded the most marked improvement on record.
  • Consumer goods also saw a marked improvement in operating conditions, while lagging the two other categories.
  • The Netherlands led the way, positing a record high PMI followed by Germany.
  • Growth rates for both output and new orders remained closed to March’s survey records.
  • Firms reported rising market confidence, with new orders rising sharply as a result of signs that both manufacturers and clients are anticipating a sharp increase in activity in the coming months.
  • New export orders also rose at a considerable pace in April.
  • Product growth was limited, however, due to some degree of capacity constraints.
  • As a result of product shortages, input prices rose at the 2nd fastest rate on record.
  • Firms raised their own charges to the strongest degree in over 18-years of available data.
  • Manufacturers increased payrolls for the third consecutive month and by the largest number since Feb-2018.
  • According to the latest data, manufacturers were at their most optimistic in nearly 9-years.

From the U.S

Manufacturing PMI figures were also in focus late in the European session.

In April, the ISM Manufacturing PMI fell from 64.7 to 60.7, falling below a forecasted 65.0.

Also market positive was an increase in the Markit Manufacturing PMI from 59.1 to 60.5. This was down marginally from a prelim 60.6, however.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Monday. Volkswagen rallied by 2.49%, with BMW rising by 1.78%. Continental and Daimler saw more modest gains of 0.21% and 0.22% respectively.

It was a mixed day for the banks. Deutsche Bank slid by 1.99%, while Commerzbank ended the day up by 1.93%.

From the CAC, it was a relatively bullish day for the banks. Credit Agricole and Soc Gen rose by 0.20% and by 0.25% respectively, with BNP Paribas gaining 0.13%.

It was a bullish day for the French auto sector. Stellantis NV and Renault ended the day with gains of 1.43% and 1.77% respectively.

Air France-KLM rose by 1.38%, while Airbus SE slipped by 0.03%.

On the VIX Index

After 2 consecutive days in the green, it was back into the red for the VIX on Monday

Partially reversing a 5.68% gain from Friday, the VIX fell by 1.61% to end the day at 18.31.

The NASDAQ slipped by 0.48%, while the Dow and the S&P500 rose by 0.70% and by 0.27% respectively.

VIX 040521 Monthly Chart

The Day Ahead

It’s a 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.

The lack of stats will leave the majors in the hands of trade data and factory orders from the U.S.

On the day, the markets will also consider corporate earnings and COVID-19 news updates from the EU and around the world.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 59 points, with the DAX down by 21 points.

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

European Equities: Manufacturing PMI and Retail Sales in Focus

Economic Calendar:

Monday, 3rd May 2021

German Retail Sales (MoM) (Mar)

Spanish Manufacturing PMI (Apr)

Italian Manufacturing PMI (Apr)

French Manufacturing PMI (Apr) Final

German Manufacturing PMI (Apr) Final

Eurozone Manufacturing PMI (Apr) Final

Wednesday, 5th May 2021

Spanish Services PMI (Apr)

Italian Services PMI (Apr)

French Services PMI (Apr) Final

German Services PMI (Apr) Final

Eurozone Markit Composite PMI (Apr) Final

Eurozone Services PMI (Apr) Final

Thursday, 6th May 2021

German Factory Orders (MoM) (Mar)

IHS Markit Construction PMI (Apr)

Eurozone Retail Sales (MoM) (Mar)

Friday, 7th May 2021

German Industrial Production (MoM) (Mar)

German Trade Balance (Mar)

ECB President Lagarde Speech

The Majors

It was a relatively bearish end to the week for the European majors on Friday. The CAC40 fell by 0.53%, with the DAX30 and the EuroStoxx600 ending the day down by 0.12% and by 0.28% respectively.

Economic data from the Eurozone weighed on the European majors at the end of the week.

1st quarter GDP numbers from Germany and the Eurozone in particular left the majors in the red, with French consumer spending figures also a drag on Friday.

From the U.S, positive economic data failed to support the majors, with the latest round of stats pointing to economic divergence stemming from extended COVID-19 containment measures across the Eurozone.

The Stats

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

From France, consumer spending, inflation, and 1st quarter GDP figures were in focus.

German and Eurozone GDP numbers for the 1st quarter also drew attention alongside prelim Eurozone inflation figures for April.

French Data

In March, consumer spending fell by 1.1% reversing a 0.3% rise from February. Economists had forecast a 0.4% rise.

Inflationary pressures picked up in April, according to prelim figures. The annual rate of inflation accelerated from 1.1% to 1.3%.

While consumption figures disappointed at the end of the 1st quarter, GDP numbers came in ahead of forecasts.

The French economy expanded by 0.4% in the 1st quarter, coming in ahead of a forecasted 0.1% growth. In the 4th quarter, the economy had contracted by 1.4%.

German Economy

In the 1st quarter, the German economy contracted by 1.7%, which was worse than a forecasted 1.5% contraction. The German economy had expanded by a modest 0.3% in the 4th quarter.

Year-on-year, the economy contracted by 3.3% in the 1st quarter. The economy had contracted by 2.7% in the final quarter of last year. Economists had forecast a contraction of 3.6%.

The Eurozone

For the Eurozone, inflationary pressures continued to pick up, with the annual rate of inflation accelerating from 1.3% to 1.6% in April.

In the 1st quarter, the Eurozone economy contracted by 0.6%, quarter-on-quarter, and by 1.8% compared with Q1 2020.

Economists had forecast a quarterly contraction of 0.8% and a year-on-year contraction of 2.0%.

In the 4th quarter, the economy had contracted by 0.7% quarter-on-quarter and by 4.9% year-on-year.

While the Eurozone economy contracted once more in the 1st quarter, the unemployment rate eased from 8.2% to 8.1%.

From the U.S

The FED’s preferred inflation measure and personal spending were in focus alongside finalized consumer sentiment and Chicago PMI figures.

Aligned with stats from earlier in the week, economic data from the U.S continued to impress at the end of the week.

In March, the core PCE Price Index increased by 1.8% year-on-year, up from 1.4% in February. Personal spending was also on the rise, supported by improving labor market and economic conditions. Spending jumped by 4.2%, reversing a 1.0% decline from February.

In April, the Michigan Consumer Sentiment index increased from 86.5 to 88.3, up from a prelim 87.4. Consumer expectations were also on the rise, with the consumer expectations index increasing from 79.7 to 82.7, up from a prelim 79.7.

Also positive, was a jump in the Chicago PMI from 66.3 to 72.1 in April.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Friday. BMW and Continental fell by 0.86% and by 0.58% respectively, with Volkswagen declining by 0.16%. Daimler bucked the trend, rising by 0.16%.

It was also a mixed day for the banks. Deutsche Bank fell by 0.48%, while Commerzbank ended the day up by 0.86%.

From the CAC, it was a mixed day for the banks. Credit Agricole rose by 0.23%, while BNP Paribas and Soc Gen fell by 0.82% and 0.65% respectively.

It was a bearish day for the French auto sector. Stellantis NV and Renault ended the day down by 0.14% and by 0.33% respectively.

Air France-KLM fell by 1.88%, with Airbus SE slipping by 0.06%.

On the VIX Index

It was a second consecutive day in the green for the VIX on Friday.

Following on from a 1.91 gain from Thursday, the VIX rose by 5.68% to end the day at 18.61.

The NASDAQ and the S&P500 fell by 0.85% and by 0.72% respectively, with the Dow ending the day down by 0.54%.

VIX 030521 DailyChart

The Day Ahead

It’s a busy day ahead on the European economic calendar. German retail sales figures are due out along with manufacturing PMIs for Italy and Spain.

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

Barring marked revision to prelim figures, Italy ad the Eurozone’s PMIs and German retail sales will have the greatest influence.

From the U.S, ISM Manufacturing PMI figures for April will also provide the majors with direction late in the session.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 117 points, with the DAX up 23 points.

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

The Week Ahead – Central Banks, Economic Data, and COVID-19 in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 57 stats in focus in the week ending 7th May. In the week prior, 61 stats had been in focus.

For the Dollar:

In the 1st half of the week, private sector PMIs and ADP nonfarm employment change figures are in focus.

Expect the market’s favored ISM Non-Manufacturing PMI and ADP figures to be key.

The focus will then shift to the weekly jobless claim figures on Thursday ahead of the NFP numbers on Friday.

Expect nonfarm payroll figures and the unemployment rate to be the main area of focus late in the week.

On the monetary policy front, FED Chair Powell is scheduled to speak early in the week. The markets will be looking for any break from the script.

In the week, the Dollar ended the week up by 0.46% to 91.280.

For the EUR:

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

Monday through Wednesday, private sector PMIs for Italy and Spain and German retail sales figures are in focus.

While retail sales are key, expect Italy and the Eurozone’s private sector PMIs to be key.

Late in the week, the German economy is back in focus.

German factory orders, industrial production, and trade data are due out. Following some disappointing GDP numbers last week, we can expect EUR sensitivity to the stats.

On the monetary policy front, ECB President Lagarde is due to speak at the end of the week…

The EUR ended the week down by 0.64% to $1.2020.

For the Pound:

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

Finalized private sector PMIs will be in focus in a shortened week.

Expect any revisions to the services PMI to be key.

The main event of the week, however, is the BoE’s monetary policy decision on Thursday.

While the BoE is expected to stand pat, any dissent and hawkish talk give the Pound a boost.

The Pound ended the week down by 0.39% to $1.3822.

For the Loonie:

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

On Tuesday, trade data for March will influence ahead of April employment and Ivey PMI figures on Friday.

Expect the employment figures to be the key driver at the end of the week.

The Loonie ended the week up 1.51% to C$1.2288 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week ahead.

Key stats include manufacturing data at the start of the week and trade data on Tuesday.

Building approvals are also due out on Wednesday but will likely have a muted impact on the Aussie Dollar.

While we can expect the trade data to have the greatest impact, the RBA monetary policy decision is the main event of the week on Tuesday.

Any hawkish chatter and expect the Aussie Dollar to eye a return to $0.80 levels.

The Aussie Dollar ended the week down by 0.30% to $0.7716.

For the Kiwi Dollar:

It’s a relatively quiet week ahead.

On Wednesday, employment figures for the 1st quarter are due out ahead of building consent numbers on Thursday.

Expect the employment change figures to be key in the week. The markets will be looking from a pickup in hiring to support a sustainable economic recovery.

The Kiwi Dollar ended the week down by 0.51% to $0.7162.

For the Japanese Yen:

It is a quiet week ahead, with the Japan markets closed Monday through Wednesday.

Economic data is limited to finalized private sector PMIs for April. Barring any marked revision from prelim figures, however, we don’t expect too much impact on the Yen.

The Japanese Yen rose by 0.85 to ¥107.88 against the U.S Dollar.

Out of China

It’s a busy week ahead.

Through the 1st half of the week, the market’s preferred Caixin survey PMI numbers are due out. Expect the manufacturing PMI for April to have the greatest impact on Tuesday.

At the end of the week, April trade figures will also be in focus.

A continued surge in both imports and exports would support riskier assets.

The Chinese Yuan ended the week up by 0.33% to CNY6.4749 against the U.S Dollar.

Geo-Politics

U.S and China and U.S and Russia relations remain the main areas of focus in the week ahead.

The markets will also need to monitor any chatter from Iran, however.

Corporate Earnings

While a number of the big names have released earnings results, a large number are still scheduled to release results in the week ahead.

From the U.S, big names include CVS Health Corp (Tues), ICHOR Holdings (Tues), and FOX Corp (Wed).

The Weekly Wrap – Impressive Stats from the U.S Give the Greenback a Much-Needed Boost

The Stats

It was a busier week on the economic calendar, in the week ending 30th April.

A total of 61 stats were monitored, following 46 stats from the week prior.

Of the 61 stats, 30 came in ahead forecasts, with 23 economic indicators coming up short of forecasts. There were 8 stats that were in line with forecasts in the week.

Looking at the numbers, 38 of the stats reflected an upward trend from previous figures. Of the remaining 23 stats, 22 reflected a deterioration from previous.

For the Greenback, a run of 3 consecutive weekly losses came to an end. In the week ending 30th April, the Dollar Spot Index rose by 0.46% to 91.28. In the previous week, the Dollar had fallen by 0.76% to 90.859.

Out of the U.S

It was a busier week on the economic data front.

In the 1st half of the week, core durable goods and consumer confidence figures were in focus.

The stats were skewed to the positive. Core durable goods reversed a 0.3% fall, with a 1.6% rise in March.

More significantly, the CB Consumer Confidence Index jumped from 109.0 to 121.7.

In the 2nd half of the week, GDP, jobless claims, personal spending, and inflation figures were in focus.

The stats were also skewed to the positive, supporting market optimism towards the economic outlook.

In the 1st quarter, the economy expanded by 6.4%, following 4.3% growth in the 4th quarter of last year.

Jobless claims figures were also positive, with initial jobless claims falling from 566k to 553k in the week ending 23rd April.

At the end of the week, personal spending also impressed, jumping by 4.2% to reverse a 1% fall from February.

Inflationary pressures were on the rise, with the FED’s preferred Core PCE Price Index rising by 1.8% in March, year-on-year. In February, the index was up by 1.4%. Following the FED’s assurances from earlier in the week, however, the uptick had a muted impact on the markets.

On the monetary policy front, the FED stood pat on policy, which was in line with expectations. FED Chair Powell continued to reassure the markets that there would be no tapering to the asset purchasing program or shift in interest rates any time soon.

The assurances had left the Greenback on the backfoot in response.

In the equity markets, the Dow and the NASDAQ fell by 0.50% and by 0.39% respectively, while the S&P500 eked out a 0.02% gain.

Out of the UK

It was a particularly quiet week.

There were no material stats to provide the Pound with direction in the week.

The lack of stats left the Pound in the hands of market optimism towards the reopening of the economy.

In the week, the Pound fell by 0.39% to end the week at $1.3822. In the week prior, the Pound had risen by 0.70% to $1.3876.

The FTSE100 ended the week up by 0.45%, partially reversing a 1.15% fall from the previous week.

Out of the Eurozone

It was a busy week on the economic data front.

In the 1st half of the week, German business and consumer confidence waned as a result of the latest spike in new COVID-19 cases.

In the 2nd half of the week, stats were also skewed to the negative weighing on the EUR.

While the French economy managed to avoid a contraction in Q1, both Germany and the Eurozone’s economies contracted.

The contraction was aligned with ECB President Lagarde’s outlook and the latest downward revision to Germany’s economic forecasts.

Inflation for the Eurozone and member states, unemployment figures from Germany and the Eurozone, and French consumer spending figures also drew attention.

Consumer spending hit reverse in France while inflationary pressures picked up in France and across the Eurozone.

Unemployment from Germany disappointed, while the Eurozone’s unemployment rate declined from 8.2% to 8.1%.

For the week, the EUR slipped by 0.64% to $1.2020. In the week prior, the EUR had risen by 1.00% to $1.2097.

The CAC40 rose by 0.18%, while the DAX30 and EuroStoxx600 ended the week down by 0.94% and by 0.34% respectively.

For the Loonie

It was a busier week.

Retail sales figures impressed mid-week, with core retail sales and retail sales both jumping by 4.8% in February. In January, core retail sales had fallen by 1.2% and retail sales by 1.1%.

At the end of the week, February GDP and March RMPI numbers were also in focus.

The economy expanded by a further 0.4%, following 0.7% growth in January. In March, the RMPI rose by 2.3% following a 6.6% jump in February.

Continued market reaction to the previous week’s BoC outlook and policy decision also supported the Loonie.

In the week ending 30th April, the Loonie jumped by 1.51% to C$1.2288. In the week prior, the Loonie had risen by 0.22% to C$1.2476.

Elsewhere

It was a bearish week for the Aussie Dollar and the Kiwi Dollar, with a Friday pullback leaving the pair in the red.

In the week ending 30th April, the Aussie Dollar fell by 0.39% to $0.7716, with the Kiwi Dollar ending the week down by 0.51% to $0.7162.

For the Aussie Dollar

It was a quiet week.

1st quarter inflation and private sector credit figures for March were in focus in the week.

The stats were skewed to the negative, pegging the Aussie back in the week.

In the 1st quarter, the trimmed mean CPI rose by 1.1% year-on-year, its lowest annual movement on record.

Private sector credit figures were positive, however, with both personal and business credit on the rise.

For the Kiwi Dollar

It was also a quiet week.

Trade data and business confidence figures were in focus.

A narrowing of New Zealand’s trade surplus was Kiwi Dollar negative, while a pickup in business confidence provided support late in the week.

The narrowing of New Zealand’s trade surplus came as imports surged at the end of the 1st quarter. Year-on-year, New Zealand’s trade surplus narrowed from NZ$2,380m to NZ$1,690m.

In April, the ANZ Business Confidence Index rose by 6 points from a prelim -8.4 to -2.0.

For the Japanese Yen

It was a busy week.

Mid-week, retail sales figures impressed. In March, retail sales were up by 5.2%, year-on-year. In February, sales had been down by 1.5%.

At the end of the week, industrial production increased by 2.2%, reversing a 1.3% decline from February.

Deflationary pressures picked up in April, however, with Tokyo core consumer prices falling by 0.2%, year-on-year. In March, core consumer prices had fallen by 0.1%.

The Japanese Yen fell by 1.33% to ¥109.31 against the U.S Dollar. In the week prior, the Yen had risen by 0.85% to ¥107.88.

Out of China

It was a quiet week on the data front.

NBS private sector PMIs were in focus at the end of the week. The stats were skewed to the negative, however, with both service and manufacturing sector growth easing in April.

The Manufacturing PMI fell from 51.9 to 51.1, with the Non-Manufacturing PMI falling from 56.3 to 54.9.

In the week ending 30th April, the Chinese Yuan rose by 0.33% to CNY6.4749. In the week prior, the Yuan had risen by 0.37% to CNY6.4963.

The CSI300 slipped by 0.23%, with the Hang Seng ended the week down by 1.22%.

European Equities: A Week in Review – 30/04/21

The Majors

It was a mixed week for the European majors in the week ending 30th April.

The CAC40 rose by 0.18%, while the DAX30 and the EuroStoxx600 ended the week down by 0.94% and by 0.34% respectively.

After a positive start to the week, a string of disappointing economic data from the Eurozone weighed on the DAX30 and EuroStoxx600.

Corporate earnings results and market optimism towards the economic recovery provided support to the European majors, however.

The Stats

In the 1st half of the week, German business and consumer confidence waned as a result of the latest spike in new COVID-19 cases.

In the 2nd half of the week, stats were also skewed to the negative weighing on the EUR.

While the French economy managed to avoid a contraction in Q1, both Germany and the Eurozone’s economies contracted.

The contraction was aligned with ECB President Lagarde’s outlook and the latest downward revision to Germany’s economic forecasts.

Inflation for the Eurozone and member states, unemployment figures from Germany and the Eurozone, and French consumer spending figures also drew attention.

Consumer spending hit reverse in France while inflationary pressures picked up in France and across the Eurozone.

Unemployment from Germany disappointed, while the Eurozone’s unemployment rate declined from 8.2% to 8.1%.

From the U.S

In the 1st half of the week, core durable goods and consumer confidence figures were in focus.

The stats were skewed to the positive. Core durable goods reversed a 0.3% fall, with a 1.6% rise in March.

More significantly, the CB Consumer Confidence Index jumped from 109.0 to 121.7.

In the 2nd half of the week, GDP, jobless claims, personal spending, and inflation figures were in focus.

The stats were also skewed to the positive, supporting market optimism towards the economic outlook.

In the 1st quarter, the economy expanded by 6.4%, following 4.3% growth in the 4th quarter of last year.

Jobless claims figures were also positive, with initial jobless claims falling from 566k to 553k in the week ending 23rd April.

At the end of the week, personal spending also impressed, jumping by 4.2% to reverse a 1% fall from February.

Inflationary pressures were on the rise, with the FED’s preferred Core PCE Price Index rising by 1.8% in March, year-on-year. In February, the index was up by 1.4%. Following the FED’s assurances from earlier in the week, however, the uptick had a muted impact on the markets.

On the monetary policy front, the FED stood pat on policy, which was in line with expectations. FED Chair Powell continued to reassure the markets that there would be no tapering to the asset purchasing program or shift in interest rates any time soon.

The assurances supported riskier assets late in the week.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Volkswagen slid by 5.51%, with BMW and Continental falling by 3.49% and by 4.83% respectively. Daimler bucked the trend, rising by 0.33%.

It was a bullish week for the banking sector. Deutsche Bank jumped by 18.43%, with Commerzbank rallying by 11.22%.

From the CAC, it was a bullish week for the banks. BNP Paribas and Credit Agricole saw gains of 5.70% and 5.75% respectively. Soc Gen led the way, however, rallying by 10.35%.

It was another bearish week for the French auto sector. Renault and Stellantis NV ended the week down by 0.56% and by 4.02% respectively.

Air France-KLM slipped by 0.28%, while Airbus rose by 1.50%.

On the VIX Index

It was a 2nd consecutive weekly gain for the VIX in the week ending 30th April. Following a 6.65% gain from the previous week, the VIX rose by 7.39% to end the week at 18.61.

3-days in the green from 5 delivered the upside in the week for the VIX.

For the week, the S&P500 ended the week up by 0.02%, while the NASDAQ and the Dow fell by 0.39% and by 0.50% respectively.

VIX 010521 Weekly Chart

The Week Ahead

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

From the Eurozone key stats include private sector PMIs for Italy and Spain and finalized PMIs for France, Germany, and the Eurozone.

Barring marked revisions, expect Italy and the Eurozone’s numbers to have the greatest impact on the majors.

From Germany, retail sales, factory orders, industrial production, and trade data will also garner plenty of interest.

Economic data from the U.S will also influence. The market’s preferred ISM survey-based PMI numbers, ADP nonfarm employment change, weekly jobless claims, and nonfarm payrolls will be in focus.

From the previous week, U.S economic data continued to support the optimistic economic outlook. Positive stats would support the majors following FED Chair Powell’s assurance on the policy front.

Economic data from China will also influence, with the market’s preferred Caixin survey PMI numbers due out.

European Equities: A Month in Review – April 2021

The Majors

It was yet another bullish month for the European majors in April, which logged a 3rd consecutive monthly gain.

The CAC40 rose by 3.33% to lead the way, with the DAX30 and EuroStoxx600 gaining 0.85% and 1.85% respectively.

After a bearish start to the year, with January having delivered heavy losses, the CAC40 was up 12.93% year-to-date. The DAX30 and EuroStoxx600 weren’t far behind, with year-to-date gains of 10.33% and 9.65% respectively.

Economic data, corporate earnings, and continued assurances from the ECB and the FED delivered support in April. Stats in the final week, which included Q1 GDP numbers, delivered some disappointment, however.

Market optimism towards the economic outlook, as the EU began to play catch up on the vaccination front also delivered support. This was in spite of the reintroduction of lockdown measures that continued to weigh on the economy.

The Stats

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

Private sector activity continued to be a key area of interest for the markets, with GDP numbers also garnering plenty of interest. In April, while German firms reported a slight slowdown in private sector growth, the Eurozone’s manufacturing PMI hit a new all-time high.

More importantly, the services sector also returned to growth in April, with the PMI hitting an 8-month high.

The continued pickup in private sector activity came in spite of the upward trend in new COVID-19 cases worldwide.

GDP numbers for France, Germany, and the Eurozone delivered mixed results, however.

In the 1st quarter, the German economy contracted by 1.7%, which was worse than a forecasted 1.5% contraction. The German economy had expanded by a modest 0.3% in the 4th quarter.

Year-on-year, the economy contracted by 3.3% in the 1st quarter. The economy had contracted by 2.7% in the final quarter of last year.

The French economy expanded by 0.4% in the 1st quarter, coming in ahead of a forecasted 0.1% growth. The economy had contracted by 1.4% in Q42020.

In the 1st quarter, the Eurozone economy contracted by 0.6%, quarter-on-quarter, and by 1.8% compared with Q1 2020.

In the 4th quarter, the economy had contracted by 0.7% quarter-on-quarter and by 4.9% year-on-year.

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

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

The stats were skewed to the negative, with industrial production in decline and Germany’s trade surplus narrowing in February.

There was an increase in factory orders, however, albeit at a slower pace than in January.

Inflation figures for the Eurozone and member states had a muted impact on the majors, however, with the ECB expecting inflationary pressures to ease later in the year.

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 further pickup in private sector activity.

For March, nonfarm payrolls surged by 916k, following a 468k jump in February. While the participation rate increased from 61.4% to 61.6, the unemployment rate fell from 6.2% to 6.0%.

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

In the month, initial jobless claims fell to a low 553k in the week ending 23rd April. This was the lowest level since the sharp spike in claims at the start of the pandemic.

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.

Retail sales bounced back in March, with core retail sales surging by 8.4% to reverse a 2.7% decline from February. Personal spending figures for March also impressed, with spending rising by 4.2% reversing a 1% fall from February.

With consumer confidence on the rise, consumption drove a pickup in service sector activity. In April, the CB Consumer Confidence Index increased from 109.0 to 121.7. The pickup painted a positive outlook on the consumption front in the near-term.

1st quarter GDP numbers from the U.S also impressed, with the economy expanding by 6.4%. In the 4th quarter, the economy had expanded by 4.3%.

Monetary Policy

There were no major surprises from the ECB, with ECB President Lagarde talking of a possible contraction in the 1st quarter.

For the markets, the ramp up in bond purchases was good enough…

From the FED, FED Chair Powell continued to quash any talk of a shift in monetary policy outlook and any tapering. The FED Chair reassured the markets that there would be plenty of warning before the FED even considering any tapering to its asset purchasing program.

The Market Movers

For the DAX: It was a bearish month for the auto sector in April. Volkswagen slid by 9.21% to partially reverse a 37.96% surge from March.

BMW and Daimler ended the month down by 5.94% and by 2.35% respectively, while Continental slipped by 0.09%.

It was a bullish month for the banks, however. Deutsche Bank rallied by 13.80%, with Commerzbank gaining 4.97%.

From the CAC, it was another bullish month for the banking sector. BNP Paribas and Credit Agricole rose by 2.91% and by 4.21% respectively. Soc Gen led the way once more, however, gaining 6.05%.

It was a bearish month for the auto sector. Renault and Stellantis NV ended the month down by 9.21% and by 8.43% respectively.

Air France-KLM slid by 9.10%, while Airbus SE rose by 3.52%.

On the VIX Index

It was a 3rd consecutive month in the red for the VIX in April, delivering a 5th monthly decline in 8-months. Following on from a 30.59% slide in March, the VIX fell by 4.07% to end the month at 18.61.

In March, the Dow rose by 2.71%, with the NASDAQ and the S&P500 ending the month up by 5.40% and by 5.24% respectively.

VIX 010521 Monthly Chart

The Month Ahead

Mid-way through the 2nd quarter, we can expect even 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.

An easing of containment measures would be needed to support a marked pickup in service sector activity. This would, therefore, likely place greater emphasis on vaccination rates for France, Germany, and Italy in particular.

Labor market conditions and consumer and business confidence will need to improve to support a pickup in hiring and business investment.

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, the markets will remain wary of any shift in monetary policy outlook, particularly from the FED.

Geopolitics will also garner some interest, with China, Russia, and Iran remaining key areas of focus.

European Equities: It’s A Busy Economic Calendar With GDP Figures in Focus

Economic Calendar:

Friday, 30th April 2021

French GDP (QoQ) (Q1)

German GDP (QoQ) (Q1)

German GDP (YoY) (Q1)

Spanish GDP (QoQ) (Q1)

Italian CPI (MoM) (Apr) Prelim

Eurozone CPI (YoY) (Apr) Prelim

Eurozone Unemployment Rate (Mar)

Eurozone GDP (QoQ) (Q1)

Eurozone GDP (YoY) (Q1)

The Majors

It was a relatively bearish day for the European majors on Thursday. The DAX30 fell by 0.90%, with the CAC40 and the EuroStoxx600 seeing losses of 0.07% and 0.26% respectively.

Economic data from the U.S failed to prevent a pullback from early gains, with stats from Germany disappointing.

The downside came amidst positive earnings results from both side of the Atlantic. From the Eurozone, Airbus returned to profit, with Total SE beating estimates.

The Stats

It was a busier day on the economic calendar on Thursday. The German economy was back in focus, with unemployment and inflation figures the key stats of the day.

Prelim April inflation figures from Spain and finalized consumer confidence figures from the Eurozone were also out. The stats had a muted impact on the European majors.

German Unemployment

In April, unemployment increased by 9k, reversing a 6k decline from March. Economists had forecast a 10k decline.

While unemployment rose in the month, the unemployment rate held steady at 6.0%.

German Inflation

In April, consumer prices rose by 0.7% month-on-month, according to prelim figures. In March, consumer prices had risen by 0.5%.

According to Destatis,

  • The annual rate of inflation ticked up from 1.7% to 2.0%.
  • Prices for goods increased by 2.6% compared with the same month a year earlier.
  • Energy prices were up by 7.9%, with food prices up by 1.6%.
  • Prices for services were up by 1.6%.

From the U.S

GDP and the weekly jobless claim figures were in focus.

In the 1st quarter, the U.S economy expanded by 6.4%, following 4.3% growth in the 4th quarter of last year. Economists had forecast growth of 6.1%.

Jobless claim figures were also positive for riskier assets. In the week ending 23rd April, initial jobless claims fell from 566k to 553k. This was marginally higher than a forecast of 549k.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. Continental and Volkswagen slid by 4.07% and by 3.15% respectively. BMW and Daimler ended the day with losses of 2.09% and 1.68% on the day.

It was another bullish day for the banks, however. Deutsche Bank rallied by 3.54 %, with Commerzbank gaining by 2.12%.

From the CAC, it was a relatively bullish day for the banks. Soc Gen rose by 0.89%, with BNP Paribas and Credit Agricole gaining 0.65% and 0.71% respectively.

It was a bearish day for the French auto sector. Stellantis NV and Renault slid by 3.81% and by 4.19% respectively.

Air France-KLM ended the day flat, while Airbus SE gained 0.70%.

On the VIX Index

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

Reversing a 1.59% fall from Wednesday, the VIX rose by 1.91% to end the day at 17.61.

The Dow and the S&P500 rose by 0.71% and by 0.68% respectively, with the NASDAQ ending the day up by 0.22%.

VIX 300421 Daily Chart

The Day Ahead

It’s a busy day ahead on the European economic calendar. 1st quarter GDP numbers for France, Germany, and the Eurozone will be in focus early in the session.

With the markets expecting restrictions in the quarter to have weighed on growth, we can expect plenty of interest in the numbers.

Other stats include prelim inflation figures for France, Italy, and the Eurozone and the March unemployment rate for the Eurozone.

From the U.S, personal spending and inflation figures will also influence later in the day. Following the FED’s assurances of unwavering support, however, a pickup in inflationary pressure should have limited impact on riskier assets.

On the corporate earnings front, Chevron Corp is scheduled to release earnings today…

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 28 points.

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

European Equities: It’s a Busy Day Ahead with President Biden, Stats, and Earnings in Focus

Economic Calendar:

Thursday, 29th April 2021

Spanish HICP (YoY) (Apr) Prelim

German Unemployment Change and Rate (Apr)

German CPI (MoM) (Apr) Prelim

Friday, 30th April 2021

French GDP (QoQ) (Q1)

German GDP (QoQ) (Q1)

German GDP (YoY) (Q1)

Spanish GDP (QoQ) (Q1)

Italian CPI (MoM) (Apr) Prelim

Eurozone CPI (YoY) (Apr) Prelim

Eurozone Unemployment Rate (Mar)

Eurozone GDP (QoQ) (Q1)

Eurozone GDP (YoY) (Q1)

The Majors

It was a relatively bullish day for the European majors on Wednesday. The CAC40 and the DAX30 rose by 0.53% and by 0.28% respectively, with the EuroStoxx600 eking out a 0.02% gain.

Market caution ahead of the FOMC monetary policy decision and all-important press conference limited the upside on the day.

Impressive corporate earnings from Deutsche Bank supported the banking sector amidst continued hope of a strong economic rebound in the 2nd half of the year.

The Stats

It was a relatively quiet day on the economic calendar on Wednesday. German consumer confidence was in focus ahead of the European open.

German GfK Consumer Climate

While the propensity to buy increased once more, albeit modestly, there were marked declines in economic and income expectations.

According to the GfK,

The income indicator slid by 13 points to 9.3 points, with the economic expectation indicator tumbling by 10.4 points to 7.3 points.

As a result, GfK is forecasting a decrease of 8.8 points in consumer confidence in May 2021. This was down by 2.7 points from a revised -6.1 points from April.

Hopes for further easing of restrictions and a revival of consumption have been noticeably dampened.

Leading economic research institutes significantly scaled back their consumption forecasts for this year. According to forecasts, real private consumption spending will hardly increase at all, rising by just 0.2% compared with 2020.

Researchers had previously forecasted consumption growth of as much as 4.9% for this year. The ECB had also relied on consumer spending to fuel the economic recovery before the third wave of the pandemic hit the EU.

Economic research institutes have also downgraded the economic growth outlook for 2021 from 4.7% to 3.7% as a result of weaker consumption forecasts.

From the U.S

Trade data was in focus later in the European session.

In March, the U.S goods trade deficit widened from $87.07bn to $90.59bn.

The stats had a muted impact on the European majors, however, with the markets focused on the FED policy decision and press conference.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Wednesday. Volkswagen and BMW fell by 1.15% and by 0.75% respectively, with Continental ending the day down by 0.02%. Daimler bucked the trend once more, rising by 0.80%.

It was another bullish day for the banks. Deutsche Bank surged by 11.17%, supported by better than expected earnings, with Commerzbank rallying by 3.11%.

From the CAC, it was a bullish day for the banks. Credit Agricole rose by 1.30%, with BNP Paribas and Soc Gen rallying by 3.12% and by 3.60% respectively.

It was also a bullish day for the French auto sector. Stellantis NV rose by 0.59%, with Renault ending the day up by 1.81%.

Air France-KLM rose by 0.38%, while Airbus SE slipped by 0.49%.

On the VIX Index

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

Following a 0.45% decline from Tuesday, the VIX fell by 1.59% to end the day at 17.28.

The Dow and the NASDAQ fell by 0.48% and by 0.28% respectively, with the S&P500 ending the day down by 0.08%.

VIX 290421 Daily Chart

The Day Ahead

It’s a relatively busy day ahead on the European economic data front. German unemployment and prelim inflation figures are in focus later today.

Prelim April inflation figures from Spain are also due out but should have a muted impact on the majors.

From the U.S, 1st quarter GDP and weekly jobless claims figures will also provide direction.

Going into the European open, market reaction to the FOMC press conference and Joe Biden’s speech this morning will also influence.

On the corporate earnings front, Amazon.com Inc and Total SE are scheduled to release earnings today…

The Futures

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

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

European Equities: Economic Data and Corporate Earnings in Focus Ahead of the FED

Economic Calendar:

Wednesday, 28th April 2021

GfK German Consumer Climate (May)

Thursday, 29th April 2021

Spanish HICP (YoY) (Apr) Prelim

German Unemployment Change and Rate (Apr)

German CPI (MoM) (Apr) Prelim

Friday, 30th April 2021

French GDP (QoQ) (Q1)

German GDP (QoQ) (Q1)

German GDP (YoY) (Q1)

Spanish GDP (QoQ) (Q1)

Italian CPI (MoM) (Apr) Prelim

Eurozone CPI (YoY) (Apr) Prelim

Eurozone Unemployment Rate (Mar)

Eurozone GDP (QoQ) (Q1)

Eurozone GDP (YoY) (Q1)

The Majors

It was a relatively bearish day for the European majors on Tuesday. The DAX30 fell by 0.31%, with the CAC40 and the EuroStoxx600 seeing losses of 0.03% and 0.08% respectively.

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

Economic data from the U.S failed to provide support late in the session, with the markets taking a more cautious stance ahead of today’s FOMC monetary policy decision.

While the markets are expecting the FED to stand pat on policy, uncertainty remains over when the FED will begin to change its position.

Labor market conditions have yet to recovery to pre-pandemic levels, which is expected the support the FED’s current stance and outlook.

The Stats

It was a particularly quiet day on the economic calendar on Tuesday. There were no material stats from the Eurozone for the markets to consider.

From the U.S

Consumer confidence was in focus late in the session.

In April, the CB Consumer Confidence Index rose from 109.0 to 121.7, coming in well ahead of a forecasted 113.0.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Tuesday. BMW fell by 0.33%, with Continental and Volkswagen seeing modest losses of 0.05% and 0.13% respectively. Daimler bucked the trend, rising by 0.23%.

It was another bullish day for the banks. Deutsche Bank and Commerzbank ended the day with gains of 1.01% and 2.01% respectively.

From the CAC, it was a mixed day for the banks. BNP Paribas slipped by 0.10%, while Credit Agricole and Soc Gen rose by 1.35% and by 2.15% respectively.

It was also a mixed day for the French auto sector. Stellantis NV fell by 0.36%, while Renault ended the day up by 0.48%.

Air France-KLM and Airbus SE saw losses of 0.34% and 1.43% respectively on the day.

On the VIX Index

It was back into the red for the VIX on Tuesday.

Partially reversing a 1.79% gain from Monday, the VIX slipped by 0.45% to end the day at 17.56.

The Dow rose by 0.01%, while the NASDAQ and the S&P500 fell by 0.34% and by 0.02% respectively.

VIX 280421 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the European economic calendar. German consumer confidence figures for May are due out ahead of the European open.

Later in the day, trade data and inventory numbers from the U.S will also draw interest.

While we can expect the numbers to influence, the FOMC monetary policy decision and rate statement are due after the European close. The markets will, therefore, likely be on a more cautious footing on the day.

On the corporate earnings front, Deutsche Bank, Apple, and Boeing are due to release quarterly earnings which will garner plenty of interest, however.

The Futures

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

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

European Equities: Corporate Earnings and U.S Stats in Focus

Economic Calendar:

Wednesday, 28th April 2021

GfK German Consumer Climate (May)

Thursday, 29th April 2021

Spanish HICP (YoY) (Apr) Prelim

German Unemployment Change and Rate (Apr)

German CPI (MoM) (Apr) Prelim

Friday, 30th April 2021

French GDP (QoQ) (Q1)

German GDP (QoQ) (Q1)

German GDP (YoY) (Q1)

Spanish GDP (QoQ) (Q1)

Italian CPI (MoM) (Apr) Prelim

Eurozone CPI (YoY) (Apr) Prelim

Eurozone Unemployment Rate (Mar)

Eurozone GDP (QoQ) (Q1)

Eurozone GDP (YoY) (Q1)

The Majors

The European majors started the week on a better footing following last week’s pullback.

On Monday, the DAX30 rose by 0.11%, with the CAC40 and the EuroStoxx600 gaining 0.28% and 0.29% respectively.

Economic data from the Eurozone and the U.S provided support, with market optimism towards the economic outlook also providing support.

There was some positive news for the markets to consider from the weekend, however. News of EU plans to allow vaccinated tourists from the U.S to enter the EU in the summer supported travel stocks.

For the majors, the upside was limited, however, as new COVID-19 cases continued to spike across some geographies

The Stats

It was a relatively quiet day on the economic calendar on Monday, with German business sentiment in focus.

In April, Germany’s IFO Business Climate Index rose from 96.6 to 96.8.  For March, the index had risen from 92.7 to 96.6.

According to the April survey,

  • Companies raised their assessments of the current business situation, with the current assessment sub-index rising from 93.1 to 94.1.
  • Firms were marginally less optimistic, however, with the business expectations sub-index falling from 100.3 to 99.5.

By Sector:

  • In Manufacturing, the business climate index rose from 24.0 to 25.3, its highest level since May-2018. Optimism across the sector declined, however.
  • For the services sector, the business climate index fell from 6.6 to 3.5. Firms were less satisfied with their current situation, with optimism also waning.

In trade, the business climate index rose from -1.4 to -0.5. A marked improvement in assessments of the current situation drove the index higher. There was increased pessimism regarding the coming months ahead, however.

From the U.S

Durable goods and core durable goods orders were in focus late in the European session.

In March, durable goods orders rose by 0.5%, partially reversing a 0.9% decline from February. Core durable goods orders increased by 1.6%, reversing a 0.3% fall from February.

Economists had forecast increases of 2.5% and 1.6% respectively.

The Market Movers

For the DAX: It was a mixed start to the week for the auto sector on Monday. Volkswagen slid by 1.02%, with Continental falling by 0.15%. BMW and Daimler found support, however, rising by 0.51% and by 0.83% respectively.

It was a bullish day for the banks. Deutsche Bank and Commerzbank rallied by 2.35% and by 2.67% respectively.

From the CAC, it was a bullish day for the banks. BNP Paribas and Credit Agricole rose by 2.77% and by 2.05% respectively. Soc Gen led the way, however, rallying by 4.03%.

It was a mixed day for the French auto sector. Stellantis NV fell by 0.24%, while Renault ended the day up by 1.75%.

Air France-KLM and Airbus SE saw gains of 1.59% and 2.82% respectively on the day.

On the VIX Index

It was back into the green for the VIX on Monday.

Partially reversing a 7.38% slide from Friday, the VIX rose by 1.79% to end the day at 17.64.

The Dow slipped by 0.18%, while the NASDAQ and the S&P500 rose by 0.87% and by 0.18% respectively.

VIX 270421 Daily Chart

The Day Ahead

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

The lack of stats will leave corporate earnings and stats from the U.S in focus.

From the U.S, consumer confidence figures for April will be in focus late in the session. On the corporate earnings front, Alphabet Inc and Microsoft Corp are scheduled to release earnings from the U.S.

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

The Futures

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

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

European Equities: German Business Sentiment and U.S Core Durable Goods in Focus

Economic Calendar:

Monday, 26th April 2021

German Ifo Business Climate Index (Apr)

Wednesday, 28th April 2021

GfK German Consumer Climate (May)

Thursday, 29th April 2021

Spanish HICP (YoY) (Apr) Prelim

German Unemployment Change and Rate (Apr)

German CPI (MoM) (Apr) Prelim

Friday, 30th April 2021

French GDP (QoQ) (Q1)

German GDP (QoQ) (Q1)

German GDP (YoY) (Q1)

Spanish GDP (QoQ) (Q1)

Italian CPI (MoM) (Apr) Prelim

Eurozone CPI (YoY) (Apr) Prelim

Eurozone Unemployment Rate (Mar)

Eurozone GDP (QoQ) (Q1)

Eurozone GDP (YoY) (Q1)

The Majors

The European majors ended the week on the back foot to mark a first weekly fall for the EuroStoxx600 in 8-weeks.

On Friday, the DAX30 slipped by 0.27%, with the CAC40 and the EuroStoxx600 declining by 0.15% and by 0.13% respectively.

Economic data from the Eurozone and the U.S failed to support the majors, with market concerns over President Biden’s capital tax gains plans weighing.

Adding to the downside at the end of the week was continued concern over the continued rise in new COVID-19 cases globally.

On Thursday, ECB President Lagarde had talked of a 1st quarter economic contraction. Failure to slow spread of the virus globally could raise concerns over demand and delay the reopening of economies.

The Stats

It was a busy day on the economic calendar on Friday, with private sector PMIs in focus.

France and Germany

According to prelim figures, the French manufacturing PMI slipped from 59.3 to 59.2 in April, while the services PMI rose from 48.2 to 50.4.

Economists had forecast PMIs of 59.0 and 46.5.

From Germany, the manufacturing PMI slipped from 66.6 to 66.4 with the services PMI falling from 51.5 to 50.1.

Economists had forecast PMIs of 65.8 and 50.8 respectively.

The Eurozone

For the Eurozone, the manufacturing PMI rose from 62.5 to a record high 63.3, with the services PMI rising from 49.6 to an 8-month high 50.3.

Economists had forecast PMIs of 62.0 and 49.1 respectively.

According to the prelim April Survey,

  • The composite PMI increased from 53.2 to a 9-month high 53.7.
  • At the turn of the quarter, the services sector returned to growth for the 1st time since Aug-2020.
  • Following 4-months of decline, output rose for the 2nd consecutive month, with the rate of increase the 2nd largest since Sep-2018.
  • New orders across the Eurozone hit the highest since Sep-2018, led by a 2nd successive record increase in new orders for manufactured goods.
  • New orders for services fell for a 9th consecutive month, though came close to stabilizing.
  • Employment levels across the private sector rose at the fastest pace since Nov-2018. Manufacturers reported the steepest job creation since Feb-2018, with service sector firms reporting a modest increase in staffing levels.

From the U.S

Private sector PMIs were in focus late in the session.

In April, the manufacturing PMI increased from 59.1 to 60.6, with the services PMI rising from 60.4 to 63.1.

Economists had forecast PMIs of 60.5 and 61.9 respectively.

The Market Movers

For the DAX: It was a bullish end to the week for the auto sector on Friday. Continental rallied by 3.12%, with BMW and Daimler rising by 0.67% and by 0.65% respectively. Volkswagen ended the day up by a more modest 0.17%.

It was a bullish day for the banks, however. Deutsche Bank rose by 1.10%, with Commerzbank gaining 1.90%.

From the CAC, it was a mixed day for the banks. BNP Paribas fell by 0.34%, while Credit Agricole and Soc Gen both rose by 0.23%.

It was also a mixed day for the French auto sector. Stellantis NV rose by 0.07%, while Renault ended the day down by 1.03%.

Air France-KLM returned to the red, sliding by 3.39%, with Airbus SE falling by 1.25%.

On the VIX Index

It was back into the red for the VIX on Friday.

Reversing a 6.91% rise from Thursday, the VIX slid by 7.38% to end the day at 17.33.

The Dow rose by 0.67%, with the NASDAQ and the S&P500 gaining 1.44% and 1.09% respectively.

VIX 260421 Daily Chart

The Day Ahead

It’s a relatively busy day ahead on the European economic calendar. Key stats include Germany’s IFO business sentiment figures for April.

We can expect plenty of sensitivity to the numbers, with business investment key to a sustainable economic recovery.

From the U.S, core durable and durable goods orders for March will also influence later in the session.

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

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 6 points.

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

The Week Ahead – Economic Data, the FED, and COVID-19 News in Focus

On the Macro

It’s a busier week ahead on the economic calendar, with 58 stats in focus in the week ending 30th April. In the week prior, 46 stats had been in focus.

For the Dollar:

Durable goods and core durable goods orders along with consumer confidence figures are due out early in the week.

Expect core durable goods and the consumer confidence index figures to have the greatest influence.

On Thursday, the focus will shift to 1st quarter GDP and jobless claims figures.

While the jobless claims figures will influence, expect the GDP numbers to be key on the day.

At the end of the week, personal spending and the FED’s preferred Core PCE Price index figures will be in focus.

On the monetary policy front, the FED is also in action on Wednesday. With the markets expecting the FED to stand pat on policy, the rate statement will be the main area of focus.

In the week, the Dollar ended the week down by 0.76% to 90.859.

For the EUR:

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

German business sentiment and consumer confidence figures get things going.

Expect both sets of numbers to influence on Monday and Wednesday.

On Thursday, the German economy is back in focus, with unemployment figures due out.

With concerns over the German economic outlook lingering, expect any jump in unemployment to test the EUR.

At the end of the week, 1st quarter GDP figures for the Eurozone and member states will also be in focus.

Other stats include April inflation figures, French consumer spending, and unemployment figures for the Eurozone.

Barring particularly dire numbers, however, we don’t expect too much influence from the numbers.

The EUR ended the week up by 1.00% to $1.2097.

For the Pound:

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

There are no major stats due out of the UK to provide the Pound with direction.

A lack of stats will leave the Pound in the hands of COVID-19 news and market risk sentiment.

The Pound ended the week up by 0.70% to $1.3876.

For the Loonie:

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

On Wednesday, February retail sales figures will provide the Loonie with direction.

At the end of the week, February GDP and March RMPI numbers will also influence.

Away from the economic calendar, expect GDP numbers from the U.S and beyond and crude oil prices to also provide direction.

The Loonie ended the week up 0.22% to C$1.2476 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week ahead.

1st quarter inflation figures are due out on Wednesday and Friday.

Expect Aussie Dollar sensitivity to the numbers.

Private sector credit figures for March are also due out at the end of the week.

The Aussie Dollar ended the week up by 0.06% to $0.7739.

For the Kiwi Dollar:

It’s a quiet week ahead.

The markets will need to wait until Thursday for March trade data and April business confidence figures.

We would expect both sets of numbers to influence.

From elsewhere, expect 1st quarter GDP numbers to also provide direction in the week.

The Kiwi Dollar ended the week up by 0.80% to $0.7199.

For the Japanese Yen:

It is also a relatively busy week ahead.

On Wednesday, retail sales figures will draw attention. Consumer spending remains key to an economic recovery. In February, retail sales had fallen by 1.5%.

The focus will then shift to a busy Friday. March inflation and industrial production figures will be in focus.

Expect prelim industrial production figures for March to have the greatest impact.

On the monetary policy front, the BoJ is also in action early in the week.

The Japanese Yen rose by 0.85 to ¥107.88 against the U.S Dollar.

Out of China

It’s a quiet week ahead.

Private sector PMI figures for April are due out on Friday. Expect the numbers to influence market risk sentiment at the end of the week.

Away from the economic calendar, however, chatter between the U.S and China will also draw attention.

The Chinese Yuan ended the week up by 0.37% to CNY6.4963 against the U.S Dollar.

Geo-Politics

U.S and China and U.S and Russia are the main areas of focus in the week ahead.

The markets will also need to monitor any chatter from Iran, however. Progress towards a nuclear agreement would be a market positive outcome.

Corporate Earnings

From the U.S, big names include:

Tesla Inc (Mon), Alphabet Inc (Tues), Microsoft Corp (Tues), Apple Inc (Wed), Boeing Co (Wed), Ford Motor Co (Wed), Amazon.com Inc (Thurs), Exxon Mobil Corp (Fri), and Chevron Corp (Fri).

From the EU:

Deutsche Bank (Wed) and Total SE (Thurs).

The Weekly Wrap – It Was another U.S Dollar Fall in a Busy Week for the Markets

The Stats

It was a quieter week on the economic calendar, in the week ending 23rd April.

A total of 46 stats were monitored, following 72 stats from the week prior.

Of the 46 stats, 34 came in ahead forecasts, with 8 economic indicators coming up short of forecasts. There were 4 stats that were in line with forecasts in the week.

Looking at the numbers, 35 of the stats reflected an upward trend from previous figures. Of the remaining 11 stats, 8 reflected a deterioration from previous.

For the Greenback, it was a third weekly loss in 6-weeks. In the week ending 23rd April, the Dollar Spot Index fell by 0.76% to 90.859. In the previous week, the Dollar had fallen by 0.66% to 91.556.

Out of the U.S

It was a quieter week on the economic data front.

Key stats included weekly jobless claims and prelim private sector PMI numbers for April.

In the week ending 16th April, initial jobless claims decreased from a revised 586k to 547k. Economists had forecast an increase to 617k.

Private sector PMIs were also positive for riskier assets.

In April, the manufacturing PMI increased from 59.1 to 60.6, with the services PMI rising from 60.4 to 63.1.

Economists had forecast PMIs of 60.5 and 61.9 respectively.

In the equity markets, the Dow fell by 0.46%, with the NASDAQ and the S&P500 declining by 0.25% and by 0.13% respectively.

Out of the UK

It was a busy week.

In the 1st half of the week, employment and inflation figures were in focus.

The stats were skewed to the positive. A more modest fall in employment supported a fall in the unemployment rate in February to 4.9%. There was also a more modest rise in claimant counts, though wage growth slowed.

Inflationary pressures picked up in March, with the UK’s annual rate of inflation accelerating from 0.4% to 0.7%. A pickup in wholesale inflationary pressures suggested a further uptick in consumer prices near-term.

At the end of the week, retail sales and prelim private sector PMIs impressed.

In March, core retail sales jumped by 4.9%, following a 2.5% increase in February. Retail sales rose by a more impressive 5.4%, following a 2.2% rise in February.

From the private sector, both service and manufacturing sector activity picked up at the turn of the quarter.

The all-important services PMI rose from 56.3 to 60.1, with the manufacturing PMI increasing from 58.9 to 60.7.

In the week, the Pound rose by 0.70% to end the week at $1.3876. In the week prior, the Pound had risen by 0.53% to $1.3779.

The FTSE100 ended the week down by 1.15%, partially reversing a 1.50% gain from the previous week.

Out of the Eurozone

It was a relatively busy week on the economic data front.

Ahead of a busy Friday, key stats included German wholesale inflation and Eurozone consumer confidence figures.

At the end of the week, prelim private sector PMI numbers for April were also in focus.

The stats were skewed to the positive. Wholesale inflationary pressures picked up further, with consumer confidence across the Eurozone improving.

The private sector PMIs were also skewed to the positive.

While private sector activity in Germany expanded at a marginally slower rate, the Eurozone services sector returned to growth for the 1st time since Aug-2020.

At the turn of the quarter, the Eurozone’s manufacturing PMI hit a new all-time high, supporting a rise in the composite PMI to a 9-month high 53.7.

On the monetary policy front, the ECB was also in action in the week. In line with market expectations, the ECB stood pat on monetary policy, assuring continued support.

The decision to stand pat was positive for the European majors. From the press conference, ECB President Lagarde talked of an economic contraction in the 1st quarter, which supported the market view of unwavering policy support.

For the week, the EUR rose by 1.00% to $1.2097. In the week prior, the EUR had risen by 0.66% to $1.1977.

The DAX30 slid by 1.17%, with the CAC40 and EuroStoxx600 ended the week with losses of 0.15% and 0.78% respectively.

For the Loonie

It was another quiet week.

Inflation and house price figures were in focus in the week.

It was a mixed set of numbers. Inflationary pressures picked up in March, with the core annual rate of inflation accelerating from 1.2% to 1.4%.

House price figures disappointed, however, rising by a modest 1.1% in March. In February, house prices had risen by 1.9%.

While the stats influenced, the Bank of Canada monetary policy decision and rate statement were the key drivers.

Mid-week, the Bank of Canada talked of a likely rise in interest rates next year. While other central banks continue to talk of an extended period of support, the BoC talked of signs of a strong recovery, supporting the shift in policy outlook.

In the week ending 23rd April, the Loonie rose by 0.22% to C$1.2476. In the week prior, the Loonie had risen by 0.22% to C$1.2503.

Elsewhere

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

In the week ending 23rd April, the Aussie Dollar rose by 0.06% to $0.7739, with the Kiwi Dollar ending the week up by 0.80% to $0.7199.

For the Aussie Dollar

It was a quiet week.

Key stats included retail sales and business confidence figures.

The stats were skewed to the positive. Retail sales increased by 1.4% in March, reversing a 0.8% fall from February.

Business confidence also improved, with the NAB Quarterly Business Confidence Index rising from 15 to 17.

While the stats were Aussie Dollar positive, the RBA meeting minutes were key in the week.

The minutes provided Aussie Dollar support, in spite of the RBA assuring continued policy support. A sharp recovery in the labor market to pre-pandemic levels supported a more optimistic economic outlook.

While the RBA does not expect to reach its targets on inflation and employment until 2024, the minutes showed that negative rates remained very unlikely.

For the Kiwi Dollar

It was a quiet week, with economic data limited to inflation figures. The stats were Kiwi Dollar positive, with inflationary pressures picking up in the 1st quarter.

Quarter-on-quarter, consumer prices increased by 0.8%, following a 0.5% rise in the 4th quarter of last year.

The annual rate of inflation picked up from 1.4% to 1.5%.

For the Japanese Yen

It was a busy week.

In the 1st half of the week, trade data was in focus.

The numbers provided some comfort, with Japan’s trade surplus widening from ¥215.9bn to ¥663.7bn in March.

Exports jumped by 16.1%, while imports rose by a more modest 5.7%.

At the end of the week, prelim private sector PMIs for April were in focus.

The services PMI remained unchanged at 48.3, while the manufacturing PMI increased from 52.7 to 53.3.

The Japanese Yen rose by 0.85% to ¥107.88 against the U.S Dollar. In the week prior, the Yen had risen by 0.79% to ¥108.80.

Out of China

It was a quiet week on the data front, with no major stats for the markets to consider.

On the monetary policy front, the PBoC left loan prime rates unchanged, which had a muted impact on the markets.

In the week ending 23rd April, the Chinese Yuan rose by 0.37% to CNY6.4963. In the week prior, the Yuan had risen by 0.49% to CNY6.5206.

The CSI300 rallied by 3.41%, with the Hang Seng ended the week up by 0.38%.

European Equities: A Week in Review – 23/04/21

The Majors

It was a bearish week for the European majors in the week ending 23rd April, with a Tuesday sell-off doing the damage.

The DAX30 slid by 1.17%, with the CAC40 and the EuroStoxx600 seeing losses of 0.46% and 0.78% respectively.

A continued spike in new COVID-19 cases across the world weighed on the majors in the week.

Positive economic data and corporate earnings provided support to limit the damage, however.

Late in the week, U.S President Biden’s tax plans added downward pressure on the global equity markets.

News hit the wires late in the week that President Biden plans to raise long-term capital gains tax for the wealthiest Americans to 43.4%. The current top tax rate sits at 23.8% on long-term capital gains.

The Stats

It was a relatively busy week on the economic data front.

Key stats included German wholesale inflation and Eurozone consumer confidence figures.

At the end of the week, prelim private sector PMI numbers for April were also in focus.

The stats were skewed to the positive. Wholesale inflationary pressures picked up further, with consumer confidence across the Eurozone improving.

Key in the week, however, were the private sector PMIs.

While private sector activity in Germany expanded at a marginally slower rate, the services sector returned to growth across the Eurozone for the 1st time since Aug-2020.

At the turn of the quarter, the Eurozone’s manufacturing PMI hit a new all-time high, supporting a rise in the composite PMI to a 9-month high 53.7.

On the monetary policy front, the ECB was also in action in the week. In line with market expectations, the ECB stood pat on monetary policy, assuring continued support.

The decision to stand pat was positive for the European majors. From the press conference, ECB President Lagarde talked of an economic contraction in the 1st quarter, which supported the market view of unwavering policy support.

From the U.S

It was a quieter week on the economic data front.

Key stats included weekly jobless claims and prelim private sector PMI numbers for April.

In the week ending 16th April, initial jobless claims decreased from a revised 586k to 547k. Economists had forecast an increase to 617k.

Private sector PMIs were also positive for riskier assets.

In April, the manufacturing PMI increased from 59.1 to 60.6, with the services PMI rising from 60.4 to 63.1.

Economists had forecast PMIs of 60.5 and 61.9 respectively.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Daimler and Volkswagen slid by 5.09% and by 6.02% respectively, with BMW falling by 2.44%. Continental bucked the trend, however, with a 0.60% gain.

It was a bearish week for the banking sector. Deutsche Bank slid by 5.94%, with Commerzbank falling by 0.66%.

From the CAC, it was a bearish week for the banks. BNP Paribas and Soc Gen slid by 4.52% and by 4.20% respectively. Credit Agricole ended the week down by a more modest 2.33%.

It was also a bearish week for the French auto sector. Renault and Stellantis NV saw losses of 6.67% and 5.71% respectively.

Air France-KLM followed a 7.78% slide with a 6.65% fall, with Airbus declining by 5.03%.

On the VIX Index

A run of 4 consecutive weeks in the red came to an end for the VIX in the week ending 23rd April. Reversing a 2.64% decline from the previous week, the VIX rose by 6.65% to end the week at 17.33.

3-days in the green from 5 delivered the upside in the week for the VIX.

 

In the week, the Dow ended the week down by 0.46%, with the NASDAQ and the S&P500 falling by 0.25% and by 0.13% respectively.

VIX 240421 Weekly Chart

The Week Ahead

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

German business, consumer confidence, and unemployment figures are in focus Monday through Thursday.

At the end of the week 1st quarter GDP numbers from France, Germany, Spain, and the Eurozone will also be key drivers.

Other stats in the week include prelim inflation figures from member states and the Eurozone.

The markets are expecting a continued pickup in inflationary pressures near-term, which should limit the impact on the majors.

From the U.S, core durable goods and consumer sentiment figures will influence early in the week.

On Thursday, weekly jobless claims and 1st quarter GDP numbers will also provide direction.

For the global financial markets, the FED’s monetary policy decision overnight on Wednesday will be key. With the markets expecting the FED to stand pat, the focus will be on the rate statement. Expect any hawkish chatter to weigh on the majors.

From China, private sector PMI figures on Friday will also influence.

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

European Equities: Prelim Private Sector PMIs for April and Corporate Earnings in Focus

Economic Calendar:

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

The European majors continued to find support following the sharp sell-off on Tuesday.

Leading the way was the CAC40, which rose by 0.91%. The DAX30 and the EuroStoxx600 saw more modest gains of 0.82% and 0.68% respectively.

Economic data, corporate earnings, and the ECB delivered support for the European majors on Thursday.

The Stats

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

On the economic data front, French business confidence and Eurozone consumer confidence figures were in focus.

In April, the French Business Survey Index rose from 98 to 104. Economists had forecast an increase to 99.

From the Eurozone, the consumer confidence index rose from -10.8 to -8.1 in April, according to prelim figures. Economists had forecast for the indicator to hold steady at -10.8.

The ECB

On the monetary policy front, the ECB left monetary policy unchanged, which was in line with market expectations.

One key area of focus was how the ECB responded to rising government bond yields after vowing to ramp up bond purchases.

According to the monetary policy statement,

  • The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2%.
  • Until at least March 2022, the Governing Council will continue to conduct net asset purchases under the PEPP. The total envelope of €1,850 will remain until the end of the 1st quarter of next year.
  • Vis-à-vis purchases under the PEPP, the ECB expects purchases to continue to be conducted at a significantly higher pace than during the first months of the year.
  • The envelope can be recalibrated if required to maintain favorable financing conditions.
  • Net purchases under the APP will continue at a monthly pace of €20bn. This is likely to run for as long as necessary to reinforce the accommodative impact of its policy rates and to end shortly before it starts to raise key ECB interest rates.
  • The Governing Council will also continue to provide ample liquidity through its refinancing operations. Funding obtained through TLTRO III plays a crucial role in supporting bank lending to firms and households.

With the statement assuring continued support, ECB President Lagarde talked of another possible contraction in the 1st quarter during the press conference.

It was not enough to sink the EUR or the European majors, however. Optimism towards a 2nd half of the year economic rebound provided support.

From the U.S

While it was a relatively quiet day, with jobless claims figures were in focus.

In the week ending 16th April, initial jobless claims fell from 586k to 547k. Economists had forecast an increase to 617k.

Existing home sales figures for March were also out but had a muted impact on the majors.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Daimler and Volkswagen fell by 0.99% and by 0.56% respectively. BMW and Continental found support, however, rising by 0.30% and by 1.54% respectively.

It was also a mixed day for the banks. Deutsche Bank slid by 2.18%, while Commerzbank rose by 0.64%.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas gained 0.64%, with Credit Agricole and Soc Gen rising by 0.20% and by 0.38% respectively.

It was a mixed day for the French auto sector, however. Stellantis NV rose by 0.25%, while Renault ended the day down by 1.33%.

Air France-KLM found much-needed support, rising by 0.88%, with Airbus SE rallying by 2.03%.

On the VIX Index

It was back into the green for the VIX on Thursday, marking a 3rd rise of the week.

Reversing a 6.32% fall from Wednesday, the VIX increased by 6.91% to end the day at 18.71.

The Dow and the NASDAQ both fell by 0.94%, with the S&P500 declining by 0.92%.

VIX 230421 Daily Chart

The Day Ahead

It’s a particularly busy day ahead on the European economic calendar. Key stats include prelim private sector PMI figures from France, Germany, and the Eurozone.

Expect market sensitivity to today’s stats. While the markets will be looking for manufacturing sector activity to continue to impress, the services sector will need to return to expansion.

With a fresh wave of new COVID-19 cases hitting major economies, slower growth in the manufacturing sector would test market resilience.

From the U.S, prelim private sector PMI figures will also be focus, with the services PMI the key driver.

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

On the corporate earnings front, Daimler and Software deliver along with Amex later in the day.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 37 points, while the DAX was down by 67 points. Ahead of the European open, market reaction to U.S President Biden’s tax plans weighed on the DAX.

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

European Equities: Economic Data, the ECB, and Corporate 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

The European majors were in recovery mode following the sharp sell-off on Wednesday.

Leading the way was the CAC40, which rose by 0.74%. The DAX30 and EuroStoxx600 saw more modest gains of 0.44% and 0.65% respectively.

There were no major stats from the Eurozone or the U.S to provide support, leaving corporate earnings and dip buying to deliver support.

Concerns over the latest spike in new COVID-19 cases pegged the majors back from a more significant recovery, however.

The Stats

It was a particularly quiet day on the economic calendar on Wednesday.

There were no material stats from the Eurozone to provide the European majors with direction mid-week.

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 mixed day for the auto sector on Wednesday. Volkswagen slid by 2.44% with Daimler and BMW falling by 0.46% and by 1.18% respectively. Continental bucked the trend, however, rising by 0.61%.

It was another bearish day for the banks. Deutsche Bank fell by 0.43%, with Commerzbank declining by 0.85%.

From the CAC, it was a bearish day for the banks. BNP Paribas and Soc Gen declined by 0.92% and by 0.91% respectively, with Credit Agricole falling by 0.87%.

The French found support, however. Stellantis NV rallied by 2.25%, with Renault ending the day up by 0.10%.

Air France-KLM partially recovered from Tuesday’s 6.10% slump with a 1.00% gain, while Airbus SE slipped by 0.21%.

On the VIX Index

It was back into the red for the VIX on Wednesday, marking a 4th daily loss in 8-sessions.

Partially reversing an 8.04% fall from Tuesday, the VIX fell by 6.32% to end the day at 17.50.

The Dow and the S&P500 both rose by 0.93% respectively, with the NASDAQ gaining 1.19%.

VIX 220421 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the European economic data front. Key stats from the Eurozone include French business confidence and flash Eurozone consumer confidence figures.

Expect the Eurozone’s consumer confidence numbers to have a greater impact on the day.

The main event of the day, however, will be the ECB monetary policy press conference.

With the markets expecting the ECB to have ramped up bond purchases, updates on purchases will be key. A failure to impress will test support for the majors.

The markets will also be looking for any shifts in view towards the economic outlook following the fresh spike in new COVID-19 cases.

From the U.S, the weekly jobless claims figures will also influence. Any reaction to the numbers may be delayed, however, as the release coincides with the ECB press conference.

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

On the corporate earnings front, Renault and Nestle are due to release results later today.

The Futures

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

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

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.

European Equities: Another Quiet Economic Calendar Leaves Earnings 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 mixed start to the week for the European majors on Monday.

Following solid gains from the week prior, the DAX30 fell by 0.59%, with the EuroStoxx600 ending the day down by 0.07%. The CAC40 avoided the red, however, with a 0.15% gain on the day.

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

The lack of stats left the majors to take their cues from the U.S markets, which pressured the European majors early.

A sharp rise in the EUR, which moved through to $1.20 levels, added further pressure on the DAX30 in particular.

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, with no major stats to provide the majors with direction late in the day.

While there were no stats, corporate earnings were in focus later in the day. Coca Cola and IBM were amongst major names delivering earnings results late in the day.

Better than forecasted earnings from both Coca Cola and IBM failed to deliver support, however.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Monday. Continental slid by 2.79%, with Daimler and Volkswagen falling by 1.70% and by 1.41% respectively. BMW saw a more modest 0.23% loss on the day.

It was a mixed day for the banks, however. While Deutsche Bank fell by 0.59%, with Commerzbank ending the day up by 2.60%.

From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen rose by 0.81% and by 0.69% respectively, with Credit Agricole gaining 1.09%.

It was a mixed session for the French auto sector. Stellantis NV rose by 1.00%, while Renault ended the day flat.

Air France-KLM followed on from Friday’s 2.24% rise with a 1.00% gain, while Airbus SE fell by 0.95%.

On the VIX Index

It was back into the green for the VIX on Monday, marking a 3rd daily gain in 9-sessions.

Reversing a 1.93% fall from Friday, the rose by 6.40% to end the day at 17.29.

The Dow and the S&P500 fell by 0.36% and by 0.53% respectively, with the NASDAQ declining by 0.98%.

VIX 200421 Daily Chart

The Day Ahead

It’s a quiet day ahead on the European economic calendar. German wholesale inflation figures for March are due out later today.

With the ECB expected to continue to deliver unwavering monetary policy support, we don’t expect too much influence from the numbers, however.

From the U.S, there are no material stats to consider, leaving the majors in the hands of COVID-19, geopolitics, and corporate earnings.

While market optimism continues to support the majors at the current levels, any spike in new COVID-19 cases would test market resilience.

On the corporate earnings front, Netflix and Johnson & Johnson are scheduled to release earnings results later in the day.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 51 points.

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