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

Economic Calendar:

Friday, 28th May 2021

French Consumer Spending (MoM) (Apr)

French GDP (QoQ) (Q1) Final

French CPI m/m (May) Prelim

French HICP m/m (May) Prelim

The Majors

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

The CAC40 led the way, rising by 0.69%, with the DAX30 and EuroStoxx600 gaining 0.28% and 0.24% respectively.

Economic data from Germany and the U.S delivered support to the majors, with a continued decline in U.S jobless claims key.

The Stats

Economic data from the Eurozone included consumer sentiment figures from Germany.

For June, the GfK is forecasting consumer confidence to rise from -8.6 to -7, based on the findings for May. Economists had forecast an increase to -5.2.

According to the latest GfK survey,

  • The economic expectations indicator surged by 41.1 points to its highest level in more than 3-years in May.
  • Supported by the sharp rise in the economic outlook, income expectations increase by 19.5 points in May. Compared with the same period of the previous year, income expectations were up more than 25 points.
  • Propensity to buy, however, fell for the first time in 4-months, falling by 7.3 points to 10 points. In spite of the decline, this was still 4.5 points higher than the same month a year earlier.

From the U.S

It was a busier day on the economic calendar.

Key stats included core durable goods, 2nd estimate GDP, and weekly jobless claims figures.

In the 1st quarter, the U.S economy expanded by 6.4%, which was in line with 1st estimates. Economists had forecast an upward revision to 6.5%.

Core durable goods rose by a further 1,0%, following a 3.2% increase in March. Economists had forecast a 0.8% rise.

Labor market conditions continued to improve. In the week ending 21st May, initial jobless claims fell from 444k to 406k. Economists had forecast a decrease to 425k.

While the major stats were skewed to the positive, an unexpected fall in durable goods orders disappointed.

In April, durable goods orders fell by 1.3%, reversing a 1.3% rise from March. Economists had forecast a 0.7% increase in orders.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Thursday. Volkswagen rallied by 2.04% to lead the way, with BMW and Continental rising by 1.24% and by 1.97% respectively. Daimler ended the day with a more modest 0.21% gain.

It was also a bullish day for the banks. Deutsche Bank rose by 0.46%, with Commerzbank rallying by 2.72%.

From the CAC, it was also a bullish day for the banks. BNP Paribas and Soc Gen ended the day up by 3.18% and by 2.97% respectively. Credit Agricole rose by 1.19%.

It was a bullish day for the French auto sector. Stellantis NV and Renault ended the day with solid gains of 3.80% and 2.78% respectively.

Air France-KLM rose by 1.16%, while Airbus SE jumped by 9.22%, the upside coming off the back of a planned ramp up in aircraft production.

On the VIX Index

It was a 2nd consecutive day in the red for the VIX on Thursday, marking a 5th day in the red from 6 sessions.

Following a 7.86% decline on Wednesday, the VIX fell by 3.57% to end the day at 16.74.

The NASDAQ slipped by 0.01%, while the Dow and the S&P500 ended the day up by 0.41% and by 0.12% respectively.

VIX 280521 Daily Chart

The Day Ahead

It’s another busy day ahead on the European economic calendar. From the Eurozone, French consumer spending, finalized GDP, and prelim inflation figures will be in focus.

Barring a marked revision to the GDP numbers, expect consumer spending and inflation to be the key drivers.

From the U.S, inflation, personal spending, and consumer sentiment figures will influence later in the day.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 169 points.

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

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

Economic Calendar:

Thursday, 27th May 2021

GfK German Consumer Climate (Jun)

Friday, 28th May 2021

French Consumer Spending (MoM) (Apr)

French GDP (QoQ) (Q1) Final

French CPI m/m (May) Prelim

French HICP m/m (May) Prelim

The Majors

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

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

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

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

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

The Stats

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

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

According to Insee.Fr,

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

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

According to Insee.Fr,

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

From the U.S

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

The Market Movers

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

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

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

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

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

On the VIX Index

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

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

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

VIX 270521 Daily Chart

The Day Ahead

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

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

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

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

The Futures

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

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

European Equities: French Business and Consumer Confidence in Focus along with FOMC Chatter

Economic Calendar:

Thursday, 27th May 2021

GfK German Consumer Climate (Jun)

Friday, 28th May 2021

French Consumer Spending (MoM) (Apr)

French GDP (QoQ) (Q1) Final

French CPI m/m (May) Prelim

French HICP m/m (May) Prelim

The Majors

It was mixed day for the European majors on Tuesday.

The CAC40 fell by 0.28%, while the DAX30 and EuroStoxx600 rose by 0.18% and by 0.03% respectively.

Economic data from the Eurozone provided support early in the day, with German’s IFO Business Climate Index on the rise.

Adding to the upside for the DAX30 early in the session was news of Vonovia SE (“VNA:GR”) agreeing to take over Deutsche Wohnen SE (“DWNI:GR”) in a multi-billion EUR deal. The DAX30 had hit a fresh record high on the news before easing back.

The Stats

Economic data from the Eurozone included finalized GDP numbers and business sentiment figures from Germany.

German GDP

In the 1st quarter, the German economy contracted by 1.8%, quarter-on-quarter, down from a prelim 1.7%. In the 4th quarter of last year, the economy had expanded by 0.5%.

According to Destatis,

  • Household final consumption expenditure fell by 5.4%, quarter-on-quarter.
  • Government final consumption expenditure rose by a modest 0.2%.
  • Gross fixed capital formation in construction rose by 1.1%, while GFCF in machinery and equipment slipped by 0.2%.

Year-on-year, the economy contracted by 3.1%.

IFO Business Climate

In May, the IFO Business Climate Index increased from 96.6 to 99.2. Economists had forecast an increase to 97.8.

Optimism improved, with the Business Expectations Index rising from 99.2 to 102.9. Assessment of current conditions also improved, with the Current Assessment Index climbing from 94.2 to 95.7.

Economists had forecast increases to 101.4 and to 95.5 respectively.

According to the IFO survey,

  • In manufacturing, the index rose modestly, with expectations falling, while firms remained satisfied with current conditions.
  • For the services sector, the Business Climate Index climbed to its highest level since Feb-2020. A marked rise in optimism and improved sentiment towards current conditions supported the upswing.
  • The index for trade was also on the rise. Firms were less pessimistic about what lies ahead, with sentiment towards the current situation seeing further improvement.

From the U.S

Consumer confidence was in focus.

In May, the CB Consumer Confidence Index slipped from 117.5 to 117.2. Economists had forecast an increase to 119.2.

According to the May survey,

  • Consumers’ assessment of present-day conditions improved, while short-term optimism deteriorated.
  • Sentiment towards income prospects also weakened.
  • Consumers’ assessment of the labor market improved, however.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. Volkswagen rose by 1.52% to lead the way, with Continental and Daimler rising by 0.78% and by 0.96% respectively. BMW ended the day with a modest loss of 0.14%.

It was also mixed day for the banks. Deutsche Bank slid by 2.05%, while Commerzbank rose by 1.55%.

From the CAC, it was also a mixed day for the banks. BNP Paribas and Credit Agricole ended the day down by 0.36% and by 0.96% respectively. Soc Gen rose by 1.17%.

It was a bullish day for the French auto sector, however. Stellantis NV and Renault ended the day with gains of 0.56% and 0.18% respectively.

Air France-KLM rose by 0.80%, while Airbus SE fell by 1.14%.

On the VIX Index

A run of 3 consecutives day in the red came to an end for the VIX on Tuesday.

Partially reversing an 8.68% fall from Monday, the VIX rose by 2.39% to end the day at 18.84.

The NASDAQ slipped by 0.03%, with the Dow and the S&P500 ending the down by 0.24% and by 0.21% respectively.

VIX 260521 Daily Chart

The Day Ahead

It’s a quiet day ahead on the European economic calendar. There are no material stats from the Eurozone or the U.S to provide the majors with direction.

A lack of stats will place greater emphasis on business and consumer confidence figures from France.

From the U.S, expect any further FOMC chatter on the U.S economy and monetary policy to also draw interest.

On Tuesday, FOMC members talked of the need to begin discussing a tapering to the asset purchasing program in the coming months.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 47 points.

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

European Equities: Economic Data from Germany and the U.S to Guide the Majors

Economic Calendar:

Tuesday, 25th May 2021

German GDP (QoQ) (Q1) Final

German GDP (YoY) (Q1) Final

German Ifo Business Climate Index (May)

Thursday, 27th May 2021

GfK German Consumer Climate (Jun)

Friday, 28th May 2021

French Consumer Spending (MoM) (Apr)

French GDP (QoQ) (Q1) Final

French CPI m/m (May) Prelim

French HICP m/m (May) Prelim

The Majors

It was a relatively bullish start to the week for the European majors on Monday, with the German markets closed.

The CAC40 and EuroStoxx600 rose by 0.35% and by 0.14% respectively.

Market optimism towards the economic outlook continued mute concerns over inflation and a possible shift in FED monetary policy. Lagarde’s assurances of unwavering support on Friday was key.

Tech stocks led the way on the day.

The Stats

There were no major stats from the Eurozone for the markets to consider, with the German markets shut on Monday.

From the U.S

There were also no material stats from the U.S to provide the majors with direction late in the session.

The Market Movers

For the DAX: Germany was on holiday at the start of the week.

From the CAC, it was a mixed day for the banks. Credit Agricole and Soc Gen ended the day down by 0.39% and by 0.15% respectively. BNP Paribas rose by 0.85% gain.

It was a bullish day for the French auto sector, however. Stellantis NV rose by 0.47%, with Renault gaining 1.41%.

Air France-KLM and Airbus SE ended the day with modest gains of 0.31% and 0.36% respectively.

On the VIX Index

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

Following a 2.52% fall on Friday, the VIX declined by 8.68% to end the day at 18.40.

The NASDAQ rallied by 1.41%, with the Dow and the S&P500 ending the day up by 0.54% and by 0.99% respectively.

VIX 250521 Daily Chart

The Day Ahead

It’s a busier day ahead on the European economic calendar. Finalized GDP numbers and IFO Business Climate figures for Germany are due out later this morning.

While we will expect the GDP numbers to draw interest, expect the IFO figures for May to be the key driver.

From the U.S, consumer confidence figures for May will also provide direction late in the European session.

The Futures

In the futures markets, at the time of writing, the Dow Mini up by 38 points, while the DAX was down by 5 points.

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

Indices Continue the Rise From the Last Week

 

Indices start this week on the front foot. The global bounce from the end of the last week seems secure.

Gold waiting for a breakout inside of the pennant formation.

Brent Oil continuing the bounce from a crucial horizontal support on the 65 USD/oz.

The EURUSD pair cannot decide which direction it is heading, having strong bullish and bearish days, one after another.

The AUDCHF pair is testing 38,2% Fibonacci. First buyers are there!

The NZDCAD pair is coming back above the lower line of the descending triangle pattern. That is potentially a start of a false breakout pattern and a legitimate buy signal.

The GBPJPY pair tests the neckline of a nice Head and Shoulders formation.

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

European Equities: A Quiet Economic Calendar and Low Volumes May Test Support

Economic Calendar:

Tuesday, 25th May 2021

German GDP (QoQ) (Q1) Final

German GDP (YoY) (Q1) Final

German Ifo Business Climate Index (May)

Thursday, 27th May 2021

GfK German Consumer Climate (Jun)

Friday, 28th May 2021

French Consumer Spending (MoM) (Apr)

French GDP (QoQ) (Q1) Final

French CPI m/m (May) Prelim

French HICP m/m (May) Prelim

The Majors

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

The CAC40 and EuroStoxx600 rose by 0.68% and by 0.57% respectively, with the DAX30 ending the day up by 0.44%.

Economic data from the Eurozone and the U.S provided further support to the majors following Thursday’s rebound.

Adding to the upside on the day was further assurances from ECB President Lagarde of no shift to policy near-term. In spite of Lagarde’s assurances, the upside at the end of the week was modest. FOMC member talk of a review of the asset purchasing program, in spite of Powell’s assurances of no near-term tapering, left the markets on a cautious footing.

The Stats

Economic data from the Eurozone was on the busier side on Friday with prelim private sector PMIs for May in focus.

France

According to prelim figures, the manufacturing PMI rose from 58.9 to 59.2, with the services PMI rising from 50.3 to 56.6.

Economists had forecast a manufacturing PMI of 58.5 and a services PMI of 53.0.

Germany

The manufacturing PMI fell from 66.2 to 64.0 while the services PMI increased from 49.9 to 52.8.

Economists had forecast a manufacturing PMI of 65.9 and a services PMI of 52.0.

The Eurozone

In May, the manufacturing PMI slipped from 62.9 to 62.8, while the services PMI increased from 50.5 to a 35-month high 55.1. Economists had forecast PMIs of 62.5 and 52.3 respectively.

Supported by the pickup in service sector activity, the composite PMI increased from 53.8 to a 39-month high 56.9. Economists had forecast an increase to 55.1.

According to the Markit survey,

  • The rate of expansion across the private sector hit the highest for over 3-years.
  • New order inflows surged at a pace not seen for almost 15-years.
  • Business optimism continued to hit new highs.
  • Price gauges rose further, however, as demand continued to outstrip supply for many goods and services.

From the U.S

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

The services PMI jumped from 64.7 to 70.1, with the manufacturing PMI rising from 60.5 to 61.5. Economists had forecast PMIs of 64.5 and 60.2 respectively.

The marked pickup in private sector activity mid-way through the 2nd quarter delivered support to the majors.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Friday. Continental rallied by 2.31% to lead the way, with Daimler rising by 0.75%. BMW and Volkswagen ended the day with modest gains of 0.11% and 0.28% respectively.

It was also a bullish day for the banks. Deutsche Bank and Commerzbank rose by 2.79% and by 0.40% respectively.

From the CAC, it was a bullish day for the banks. Credit Agricole and Soc Gen ended the day up by 0.71%S and by 0.48% respectively. BNP Paribas eked out a 0.05% gain.

It was also a bullish day for the French auto sector. Stellantis NV rose by 2.07%, with Renault gaining 0.59%.

Air France-KLM avoided further losses, rising by 0.02%, with Airbus SE ended the day up by 1.45%.

On the VIX Index

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

Following a 6.81% fall from Thursday, the VIX declined by 2.52% to end the day at 20.15.

The Dow rose by 0.36%, while the NASDAQ and the S&P500 ended the day down by 0.48% and by 0.08% respectively.

VIX 240521 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 European majors with direction.

Trading volumes will also be on the lighter side, with Germany on holiday at the start of the week.

From the U.S, there are also no major stats for the markets to consider.

With little to distract the markets, expect any central bank chatter to influence. We can also expect concerns over inflation to remain a factor following last week’s private sector PMI numbers.

The Futures

In the futures markets, at the time of writing, the Dow Mini up by 19 points.

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

The Week Ahead – Economic Data and the RBNZ in Focus

On the Macro

It’s a quiet week ahead on the economic calendar, with 36 stats in focus in the week ending 28th May. In the week prior, 69 stats had been in focus.

For the Dollar:

In a quiet 1st half of the week, consumer confidence figures for May are due out. Following disappointing NFP and retail sales figures, expect plenty of interest in the May figures.

After a quiet Wednesday, the focus will then shift to core durable goods orders, 2nd estimate GDP numbers, and jobless claim figures on Thursday.

At the end of the week, inflation personal spending, and finalized consumer sentiment figures will also influence.

In the week, the Dollar ended the week down by 0.34% to 90.017.

For the EUR:

It’s a quieter week on the economic data front.

From Germany, final 1st quarter GDP numbers are due out along with business and consumer sentiment figures.

Expect plenty of influence from the numbers, with both business investment and consumer spending key to any sustainable economic recovery.

At the end of the week, French consumer spending, inflation, and final 1st quarter GDP numbers are also due out.

Barring any marked revision to the GDP numbers, consumer spending and inflation will likely garner the greatest interest.

The EUR ended the week up by 0.34% to $1.2182.

For the Pound:

It’s a particularly quiet week ahead on the economic calendar. There are no material stats due out of the UK.

A lack of stats will leave COVID-19 news and the ongoing easing of lockdown measures to provide direction.

The Pound ended the week up by 0.38% to $1.4150.

For the Loonie:

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

There are no material stats to provide the Loonie with direction. With no stats to consider, crude oil inventory numbers and market risk sentiment will influence in the week ahead.

We continue to see any downside for the Loonie to be modest.

The Loonie ended the week up 0.31% to C$1.2066 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s yet another relatively quiet week ahead.

Key stats include construction work done and new CAPEX figures for the first quarter.

With business investment key to the ongoing economic recovery, expect the CAPEX figures to be key.

The Aussie Dollar ended the week down by 0.50% to $0.7732.

For the Kiwi Dollar:

It’s a busier week ahead.

Early in the week, retail sales figures for the 1st quarter will influence ahead of trade data for April on Wednesday.

The RBNZ monetary policy decision will be the main event on Wednesday, however.

With the markets expecting the RBNZ to stand pat, the rate statement and press conference will be the key drivers. A number of central banks have recently delivered hawkish statements…

The Kiwi Dollar ended the week down by 1.05% to $0.7174.

For the Japanese Yen:

It is a quieter week ahead.

Inflation figures for Tokyo are due out at the end of the week. Expect core inflation figures for May to garner the greatest interest, though we don’t expect too much influence on the Yen.

The Japanese Yen rose by 0.36% to ¥108.96 against the U.S Dollar.

Out of China

It’s a quiet week ahead, with no material stats for the markets to consider.

The Chinese Yuan ended the week down by 0.05% to CNY6.4340 against the U.S Dollar.

Geo-Politics

There are no major risks to consider in the week ahead.

With the Iranian presidential elections coming up and moderate Rouhani on the way out, however, there could be question marks over the nuclear agreement… Election Day is June, 18th.

As always, the markets will also need to monitor chatter from Capitol Hill and Beijing.

The Weekly Wrap – Inflation Jitters and Impressive Stats Were the Highlights of the Week

The Stats

It was a busy week on the economic calendar, in the week ending 21st May.

A total of 69 stats were monitored, following 49 stats from the week prior.

Of the 69 stats, 35 came in ahead forecasts, with 26 economic indicators coming up short of forecasts. There were 8 stats that were in line with forecasts in the week.

Looking at the numbers, 29 of the stats reflected an upward trend from previous figures. Of the remaining 40 stats, 33 reflected a deterioration from previous.

For the Greenback, economic data from the U.S and FOMC talk of a review of the asset purchasing program provided some Dollar support. In the week ending 21st May, the Dollar Spot Index fell by 0.34% to 90.017. In the previous week, the Dollar had risen by 0.08% to 90.304.

Out of the U.S

It was a quieter week on the economic data front.

Key stats included manufacturing numbers for NY State and Philly, the weekly jobless claim figures, and prelim private sector PMIs.

It was a mixed set of numbers for the Greenback and the broader market.

Manufacturing sector activity saw slower growth in May, with both the NY Empire State Manufacturing Index and Philly Manufacturing Index declining.

The modest falls were not enough to spook the markets, however.

On Thursday, the weekly jobless claim figures did draw plenty of interest, supporting riskier assets.

In the week ending 14th May, initial jobless claims fell from 478k to 444k.

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

The services PMI jumped from 64.7 to 70.1, with the manufacturing PMI rising from 60.5 to 61.5. Economists had forecast PMIs of 64.5 and 60.2 respectively.

Other stats in the week included housing sector data that had a muted impact on the Dollar and the broader markets.

While the stats drew plenty of attention, the FOMC meeting minutes out mid-week were key.

The minutes revealed chatter amongst member of a need to review monetary policy amidst the sharp economic rebound. Asset purchases, in particular, were highlighted, contradicting FED Chair Powell’s assurances that asset purchases would remain unchanged. The markets had previously got jittery over a possible tapering to the asset purchasing program…

In the equity markets, the Dow fell by 0.51%, with the NASDAQ and the S&P500 seeing losses of 0.31% and 0.43% 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, delivering support for the Pound.

In March, the unemployment rate fell from 4.9% to 4.8%, with employment jumping by 84k in the 1st quarter.

Claimant counts fell by 15.1k in April, following a 19.4k decline in March, which was also positive.

Mid-week, inflation figures also delivered the Pound with a boost.

In April, the annual rate of inflation accelerated from 0.7% to 1.5%, with consumer prices rising by 0.6% month-on-month. In March, consumer prices had risen by 0.3%.

Through the 2nd half of the week, April retail sales and prelim private sector PMIs for May were in focus.

Retail sales jumped by 9.2% in the month of April, with core retail sales up by 9.0%. Year-on-year, core retail sales was up 37.7%, with retail sales up by 42.4%.

From the private sector, the manufacturing PMI jumped from 60.9 to 66.1, with the services PMI rising from 61.0 to 61.8. Economists had forecast PMIs of 60.5 and 62.0 respectively.

Following a hawkish BoE, the latest stats coupled with the UK’s reopening point to further upside for the Pound.

In the week, the Pound rose by 0.38% to end the week at $1.4150. In the week prior, the Pound had risen by 0.81% to $1.4097.

The FTSE100 ended the week down by 0.36%, following a 1.21% decline from the previous week.

Out of the Eurozone

Early in the week, the economic indicators for the Eurozone were in focus.

2nd estimate GDP numbers for the 1st quarter were in line with prelim figures providing the EUR with little direction.

Trade data disappointed, however, with the Eurozone’s trade surplus narrowing from €17.7bn to €15.8bn. The narrowing was as a result of a sharp increase in imports, however. Exports rose by 8.9% when compared with March 2020.

At the end of the week, it was prelim private sector PMI figures for May that were key.

According to prelim figures, the French manufacturing PMI rose from 58.9 to 59.2, with the services PMI rising from 50.3 to 56.6.

Germany’s manufacturing PMI fell from 66.2 to 64.0 while the services PMI increased from 49.9 to 52.8.

For the Eurozone

In May, the manufacturing PMI slipped from 62.9 to 62.8, while the services PMI increased from 50.5 to a 35-month high 55.1. Economists had forecast PMIs of 62.5 and 52.3 respectively.

Supported by the pickup in service sector activity, the composite PMI increased from 53.8 to a 39-month high 56.9. Economists had forecast an increase to 55.1.

According to the Markit survey,

  • The rate of expansion across the private sector hit the highest for over 3-years.
  • New order inflows surged at a pace not seen for almost 15-years.
  • Business optimism continued to hit new highs.
  • Price gauges rose further, however, as demand continued to outstrip supply for many goods and services.

For the week, the EUR rose by 0.34% to $1.2182. In the week prior, the EUR had fallen by 0.21% to $1.2141.

The EuroStoxx600 rose by 0.43%, with CAC40 and the DAX30 ending the week up by 0.02% and by 0.14% respectively.

For the Loonie

It was a relatively quiet week.

Inflation and retail sales figures were in focus through the 2nd half of the week.

The stats were skewed to the positive.

Aligned with other economies, there was a marked pickup in inflationary pressures in April.

The annual rate of core inflation accelerated from 1.4% to 2.3%, with core consumer prices rising by 0.5% in the month. In March, core consumer prices had risen by 0.3%.

Month-on-month, consumer prices also rose by 0.5%, following a 0.5% increase in March.

Retail sales rose by a further 3.6% in March, following a 4.8% jump in February. Core retail sales increased by a more impressive 4.3%, month-on-month. Core retail sales had also risen by 4.8% in February.

In the week ending 21st May, the Loonie rose by 0.31% to C$1.2066. In the week prior, the Loonie had risen by 0.24 % to C$1.2104.

Elsewhere

It was another bearish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 21st May, the Aussie Dollar fell by 0.50% to $0.0.7732, with the Kiwi Dollar ending the week down by 1.05% to $0.71724.

For the Aussie Dollar

It was a busy week.

Economic data included consumer confidence and wage growth figures along with employment and retail sales numbers.

It was a mixed week, with consumer sentiment taking a hit in May, while wages grew by a further 0.6% in the 1st quarter.

On the employment front, a fall in the participation rate led to a fall in the unemployment rate from 5.6% to 5.5%.

While employment fell by 30.6k in April, full employment rose by 33.8, which was Aussie Dollar positive.

At the end of the week, prelim retail sales failed to support the Aussie Dollar, with sales up 1.1% in April. In March, retail sales had risen by 1.3%.

On the monetary policy front, the RBA meeting minutes kept the Aussie Dollar pegged back early in the week. With the board envisaging a hold on cash rates until 2024 at the earliest, there was little for the markets to take other than optimism towards the continued economic recovery.

For the Kiwi Dollar

It was a particularly quiet week.

Wholesale inflation figures for the 1st quarter failed to give the Kiwi a boost despite a pickup in wholesale inflationary pressure.

In Q1, the producer input price index rose by 1.2%, following a 0.6% increase in the 4th quarter of last year.

With the markets expecting a marked pickup in inflationary pressures, however, there was little support for the Kiwi.

For the Japanese Yen

It was a busier week.

Early in the week, 1st quarter GDP numbers were in focus.

The Japanese economy contracted by 1.30% in the quarter, which was marginally worse than a forecasted 1.20% contraction. Year-on-year, the economy contracted by 5.1%. In the 4th quarter, the economy had expanded by 2.8%, quarter-on-quarter, and by 11.6% year-on-year.

Trade figures were upbeat in spite of a narrowing of the trade surplus, with exports jumping by 38% in April. In March, exports had risen by 16.1%.

At the end of the week, prelim private sector PMI numbers for May were disappointing, however.

The manufacturing PMI slipped from 53.6 to 52.5, with the services PMI sliding from 49.5 to 45.7. Firms attributed a renewed surge in new COVID-19 cases to the deterioration in private sector conditions.

Other stats in the week included finalized industrial production and inflation figures that had a muted impact on the Yen.

The Japanese Yen rose by 0.36% to ¥108.96 against the U.S Dollar. In the week prior, the Yen had fallen by 0.69% to ¥109.35.

Out of China

It was a relatively busy week on the data front.

Fixed asset investment, industrial production, and retail sales figures set the tone at the start of the week.

The stats were skewed to the negative, testing support for riskier assets on Monday.

Year-on-year, industrial production increased by 9.8% in April, which was down from 14.1% in March. Retail sales was up by 17.7%, which was down from 34.2% in March.

Compared with April 2020, fixed asset investment was up by 19.9%. Fixed asset investment had been up by 25.6% in March.

In the week ending 21st May, the Chinese Yuan slipped by 0.05% to CNY6.4340. In the week prior, the Yuan had fallen by 0.06% to CNY6.4332.

The CSI300 rose by 0.46%, with the Hang Seng ending the week up by 1.54%.

European Equities: A Week in Review – 21/05/21

The Majors

It was another choppy week for the European majors in the week ending 21st May.

In the week ending 21st May, the EuroStoxx600 rose by 0.43%, with the CAC40 and the DAX30 ending the week up by 0.14% and 0.02% respectively.

Inflation jitters returned early in the week, with the majors seeing deep red on Wednesday ahead of the FOMC meeting minutes.

Concerns over the FED needing to shift its monetary policy stance left the majors in the red before a Thursday and Friday recovery.

The FOMC meeting minutes, in fact, revealed that members were looking to review monetary policy in the coming months following the sharp economic rebound.

Plans to review the asset purchase program was highlighted within the minutes.

On the economic data front, however, jobless claims figures from the U.S provided support ahead of private sector PMIs numbers on Friday.

Impressive PMIs on Friday added further support to the European majors at the end of the week.

The Stats

Early in the week, Eurozone 2nd estimate GDP and trade data for March were in focus.

While 2nd estimates were in line with 1st estimate figures, trade data was skewed to the negative.

In March, the Eurozone’s trade surplus narrowed from €17.7bn to €15.8bn. Economists had forecast a widening to €26.5bn.

The narrowing of the surplus was as a result of a 19.2% jump in imports, signaling strong demand rather than a marked decline in exports. Exports rose by 8.9% when compared with March 2020.

Mid-week, finalized inflation figures from the Eurozone and wholesale inflation figures from Germany had a muted impact on the majors.

At the end of the week, however, prelim private sector PMI figures for May were key.

According to prelim figures, the French manufacturing PMI rose from 58.9 to 59.2, with the services PMI rising from 50.3 to 56.6.

Germany’s manufacturing PMI fell from 66.2 to 64.0 while the services PMI increased from 49.9 to 52.8.

For the Eurozone

In May, the manufacturing PMI slipped from 62.9 to 62.8, while the services PMI increased from 50.5 to a 35-month high 55.1. Economists had forecast PMIs of 62.5 and 52.3 respectively.

Supported by the pickup in service sector activity, the composite PMI increased from 53.8 to a 39-month high 56.9. Economists had forecast an increase to 55.1.

According to the Markit survey,

  • The rate of expansion across the private sector hit the highest for over 3-years.
  • New order inflows surged at a pace not seen for almost 15-years.
  • Business optimism continued to hit new highs.
  • Price gauges rose further, however, as demand continued to outstrip supply for many goods and services.

From the U.S

Key stats included manufacturing numbers for NY State and Philly, the weekly jobless claim figures, and prelim private sector PMIs.

It was a mixed set of numbers for the Greenback and the broader market.

Manufacturing sector activity saw slower growth in May, with both the NY Empire State Manufacturing Index and Philly Manufacturing Index declining.

The modest falls were not enough to spook the markets, however.

On Thursday, the weekly jobless claim figures did draw plenty of interest, supporting riskier assets.

In the week ending 14th May, initial jobless claims fell from 478k to 444k.

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

The services PMI jumped from 64.7 to 70.1, with the manufacturing PMI rising from 60.5 to 61.5. Economists had forecast PMIs of 64.5 and 60.2 respectively.

Other stats in the week included housing sector data that had a muted impact on the Dollar and the broader markets.

While the stats drew plenty of attention, the FOMC meeting minutes out mid-week were key.

The minutes revealed chatter amongst member of a need to review monetary policy amidst the sharp economic rebound. Asset purchases, in particular, were highlighted, contradicting FED Chair Powell’s assurances that asset purchases would remain unchanged. The markets had previously got jittery over a possible tapering to the asset purchasing program…

The Market Movers

From the DAX, it was another bullish week for the auto sector. Daimler and Volkswagen both rose by 1.82% respectively, with Continental and BMW rising by 1.55% and by 1.48% respectively.

It was a mixed week for the banking sector, however. Deutsche Bank rose by 2.12%, while Commerzbank ended the week flat.

From the CAC, it was a mixed week for the banks. Soc Gen rose by 0.54%, while BNP Paribas and Credit Agricole ended the week down by 1.40% and by 7,88% respectively.

It was also a mixed week for the French auto sector. Stellantis NV rose by 2.38%, while Renault ended the week down by 2.54%.

Air France-KLM and Airbus ended the week with losses of 3.12% and 1.67% respectively.

On the VIX Index

It was a 2nd consecutive week in the green for the VIX in the week ending 21st May. Following a 12.70% gain from the previous week, the VIX rose by 7.12% to end the week at 20.15.

3-days in the green from 5 sessions, which included an 8.22% rise on Tuesday, delivered the upside in the week for the VIX.

For the week, the Dow fell by 0.51%, with the NASDAQ and the S&P500 ending the week down by 0.31% and by 0.43% respectively.

VIX 220521 Weekly Chart

The Week Ahead

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

On Tuesday, the German economy is back in focus.

Finalized 1st quarter GDP and May business sentiment figures are due out.

Barring any revisions to the GDP numbers, expect the Ifo business climate index figures to be the key driver.

The focus will then shift to German consumer climate figures on Thursday and French consumer spending and GDP numbers on Friday.

Expect Germany’s consumer climate and France’s consumer spending figures to garner the greatest interest.

From the U.S, consumer confidence figures are due out early in the week.

On Thursday, 2nd estimate GDP numbers are due out alongside jobless claims and core durable goods orders.

Barring any revisions from 1st estimate GDP numbers, expect the jobless claims figure to be key.

At the end of the week, personal spending, inflation, and consumer sentiment figures will also influence.

Bear Market? Not Yet

 

Indices hold strong after most of them create a double bottom formation. In some cases, it is strengthened by the fact that the price bounced off a long-term uptrend line. This is the bread and butter for technical buyers.

Gold is inside of a pennant formation waiting for, most probably, a bullish breakout.

Brent Oil bounces from a crucial support on the 65 USD/bbl.

The EURUSD pair is on a good way to beat the highs from the beginning of the year.

The USDCAD pair with a new, long-term lows and not stopping.

The EURPLN pair breaks the major long-term uptrend line, showing us a global positive sentiment towards risky assets.

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

European Equities: Prelim Private Sector PMIs for May in Focus

Economic Calendar:

Friday, 21st May

French Manufacturing PMI (May) Prelim

French Services PMI (May) Prelim

German Manufacturing PMI (May) Prelim

German Services PMI (May) Prelim

Eurozone Manufacturing PMI (May) Prelim

Eurozone Markit Composite PMI (May) Prelim

Eurozone Services PMI (May) Prelim

The Majors

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

The CAC40 and EuroStoxx600 rose by 1.29% and by 1.27% respectively, with the DAX30 ending the day up by 1.70%.

Following Wednesday’s losses, the FOMC meeting minutes released after the European close on Wednesday pegged the majors back early on Thursday.

With economic data from the Eurozone on the lighter side, stats from the U.S provided support later in the European session, however.

The Stats

Wholesale inflation figures for Germany were in focus this morning.

In April, the producer price index rose by 0.8% month-on-month, following a 0.9% increase in February.

According to Destatis,

  • Month-on-month, energy prices increased by 0.6%, with prices for intermediate goods rising by 1.8%.
  • Prices for non-durable goods increased by 0.6%, month-on-month, with prices for durable consumer goods up 0.4%.
  • Compared with April 2020, the index of producer prices for industrial products increased by 5.2%. This was the highest year-on-year increase since August 2011.
  • Prices of intermediate goods increased by 8.2%, compared with April 2020.
  • Compared with April 2020, energy prices jumped by 10.6%.
  • Price for durable consumer goods increased by 1.6%, with prices for capital goods up by 1.0%.
  • Non-durable consumer goods prices declined by 0.6%, however.

From the U.S

It was a relatively busy day on the economic calendar on Thursday. Philly FED Manufacturing numbers for May were in focus along with weekly jobless claim figures.

In May, the Philly FED Manufacturing Index fell from 50.2 to 31.5. Economists had forecast a decline to 43.0.

More significantly, however, initial jobless claims for the week ending 14th May fell from 478k to 444k. Economists had forecast a decline to 450k.

The downward trend in claims continues to support the optimistic outlook towards the U.S economy. Improving labor market conditions combined with the upward trend in personal savings rates point to a sharp pickup in consumption to fuel economic growth.

Impressive labor market figures will add further pressure on the FED to reconsider its policy stance in the coming months.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Thursday. Daimler rallied by 2.33%, with BMW and Volkswagen seeing gains of 1.58% and 1.49% respectively. Continental rose by a more modest 0.64% on the day.

It was also a bullish day for the banks. Deutsche Bank and Commerzbank ended the day up by 0.27% and by 0.93% respectively.

From the CAC, it was a bullish day for the banks. Credit Agricole rose by 0.63%, with BNP Paribas and Soc Gen both seeing gains of 0.48% respectively.

It was also a bullish day for the French auto sector. Stellantis NV rose by 1.87%, with Renault gaining 0.14%.

Air France-KLM saw more red, falling by 2.34%, while Airbus SE ended the day up by 1.53%.

On the VIX Index

It was back into the red for the VIX on Thursday, ending a run of 3 consecutive days in the green.

Reversing a 3.66% gain from Wednesday, the VIX fell by 6.81% to end the day at 20.67.

The NASDAQ rallied by 1.77%, with the Dow and the S&P500 ending the day up by 0.55% and by 1.06% respectively.

VIX 210521 Daily Chart

The Day Ahead

It’s a busy day ahead on the European economic calendar. Prelim private sector PMI numbers for France, Germany, and the Eurozone are due out.

Expect plenty of influence from the numbers, with the markets looking for a pickup in service sector activity to support the economic recovery.

From the U.S, prelim private sector PMIs are also due out, with the services PMI likely to have the greatest impact on the majors.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 18 points.

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

European Equities: The FOMC Meeting Minutes To Influence Ahead Of U.S Stats Later Today

Economic Calendar:

Friday, 21st May

French Manufacturing PMI (May) Prelim

French Services PMI (May) Prelim

German Manufacturing PMI (May) Prelim

German Services PMI (May) Prelim

Eurozone Manufacturing PMI (May) Prelim

Eurozone Markit Composite PMI (May) Prelim

Eurozone Services PMI (May) Prelim

The Majors

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

The CAC40 and EuroStoxx600 the fell by 1.43% and by 1.51% respectively, with the DAX30 ended the day down by 1.77%.

Economic data was on the lighter side mid-week, leaving the markets to look ahead to the FOMC meeting minutes due out after the European close.

Lingering concerns over inflation and the possible impact on FED monetary policy had pegged the European majors back on Tuesday.

It was much of the same on Wednesday, with finalized inflation figures from the Eurozone doing little to distract the markets.

The Stats

Finalized inflation figures for the Eurozone were in focus on Wednesday.

In April, the annual rate of inflation picked up from 1.3% to 1.6%, which was in line with prelim figures. A year earlier, the annual rate of inflation had been 0.3%.

According to Eurostat,

  • The lowest annual rates of inflation were registered in Greece (-1.1%), Portugal (-0.1%), and Malta (+0.1%).
  • Luxembourg registered the highest annual rate inflation at 3.3%.

The highest contribution to the annual euro area rate of inflation came from:

  • Energy (+0.96 percentage points)
  • Services (+0.37 pp)
  • Food, alcohol, & tobacco (+0.16 pp)
  • Non-energy industrial goods (+0.12 pp)

The annul core rate of inflation softened from 0.9% to 0.7%, however, which worse than a forecasted annual core rate of inflation of 0.8%.

In the month of April, consumer prices rose by a further 0.6%, which was in line with forecasts. In March, consumer prices had risen by 0.9%.

From the U.S

It was a particularly quiet day on the economic calendar on Wednesday. There were no major stats for the markets to consider.

While due out after the European close, the FOMC meeting minutes were a factor through the day. Concerns over any hawkish chatter pegged the majors back.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. Continental and Daimler slid by 2.21% and by 2.00% respectively. BMW and Volkswagen saw relatively modest losses of 0.91% and 0.96% respectively.

It was also a mixed day for the banks. Deutsche Bank rose by 0.07%, while Commerzbank fell by 1.55%.

From the CAC, it was a bearish day for the banks. Credit Agricole slid by 2.62%, with BNP Paribas falling by 1.98%. Soc Gen ended the day down by a more modest 0.65%.

It was also a bearish day for the French auto sector. Stellantis NV fell by 1.60%, with Renault tumbling by 4.22%.

Air France-KLM and Airbus SE returned to the red, with losses of 2.30% and 2.14% respectively.

On the VIX Index

It was a 3rd consecutive day in the green for the VIX on Wednesday.

Following on from a 7.91% gain from Tuesday, the VIX rose by 3.66% to end the day at 22.13.

The NASDAQ slipped by 0.03%, with the Dow and the S&P500 ending the day down by 0.48% and by 0.29% respectively.

VIX 200521 Daily Chart

The Day Ahead

It’s a quiet day ahead on the European economic calendar. There are no material stats to provide the majors with direction in the early part of the day.

The lack of stats will leave the FOMC meeting minutes from overnight to influence.

From the minutes, the key takeaway was the talk of a possible review of the current asset purchasing program as a result of the sharp economic recovery and optimistic outlook.

Later in the day, Philly FED Manufacturing and weekly initial jobless claim figures will also influence.

The markets will be looking for claims to fall back to sub-400k levels to fuel another upward move.

The Futures

In the futures markets, at the time of writing, the Dow Mini down by 90 points.

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

European Equities Finalized Eurozone Inflation Figures in Focus Ahead of the FOMC Minutes

Economic Calendar:

Wednesday, 19th May

Eurozone Core CPI (YoY) (Apr) Final

Eurozone CPI (MoM) (Apr) Final

Eurozone CPI (YoY) (Apr) Final

Friday, 21st May

French Manufacturing PMI (May) Prelim

French Services PMI (May) Prelim

German Manufacturing PMI (May) Prelim

German Services PMI (May) Prelim

Eurozone Manufacturing PMI (May) Prelim

Eurozone Markit Composite PMI (May) Prelim

Eurozone Services PMI (May) Prelim

The Majors

It was a mixed day for the European majors on Tuesday, with the EuroStoxx600 managing to recover Monday’s modest loss.

The CAC40 and the DAX30 fell by 0.07% and by 0.21% respectively, while the EuroStoxx600 ended the day up by 0.28%.

Unwavering market optimism delivered yet more support for the majors. Reopening plans were the story of the day, providing the EuroStoxx600 a boost, while economic data from the Eurozone pegged the majors back.

Ahead of the FOMC meeting minutes, due out after today’s European close, inflation concerns were also a drag on riskier assets.

From the U.S, stats were limited to housing sector data that had a muted impact on the European majors late in the day.

The Stats

After a quiet start to the week, the Eurozone’s economy was back in focus this morning.

Economic data included 2nd estimate GDP numbers and March trade data for the Eurozone.

First Quarter Growth

In the 1st quarter, the Eurozone economy contracted by 0.6%, quarter-on-quarter. Year-on-year, the economy contracted by 1.8%. Both were in line with 1st estimates.

Please see here for the Eurostat report.

Trade

In March, the Eurozone’s trade surplus narrowed from €17.7bn to €15.8bn. Economists had forecast a widening to €26.5bn.

According to Eurostat,

  • Exports to the rest of the world increased by 8.9% to €212.1bn in March 2021, when compared with March 2020.
  • Imports from the rest of the world jumped by 19.2% to €196.3bn, however, when compared with March 2020.
  • In March 2020, the trade surplus had stood at €29.9bn.
  • Intra-euro area trade surged by 27.5% to €199.0bn in March 2021, when compared with March 2020.
  • In January to March 2021, euro area exports to the rest of the world fell by 0.6% to €564.0bn, however, when compared with the same period in 2020.
  • Imports increased by 0.3% to €514.4bn, leading to a trade surplus of €49.5bn compared with a surplus of €54.6bn in January-March 2020.
  • Intra-euro area trade increased by 6.2% to €514.2bn in January to March 2021, when compared with January to March 2020.

From the U.S

It was a quiet day on the economic calendar on Tuesday. Housing sector data for April were in focus that had a muted impact on the majors late in the European session.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. Continental rose by 0.94%, with Daimler and Volkswagen seeing gains of 0.28% and 0.56% respectively. BMW slipped by 0.02%, however.

It was also a mixed day for the banks. Deutsche Bank fell by 0.37%, while Commerzbank ended the day up by 0.62%.

From the CAC, it was a mixed day for the banks. BNP Paribas rose by 0.16%, while Credit Agricole and Soc Gen saw losses of 0.78% and 0.13% respectively.

It was also a mixed day for the French auto sector. Stellantis NV fell by 0.21%, while Renault gained 0.16% on the day.

Air France-KLM and Airbus SE avoided more red, with gains of 2.34% and 0.25% respectively.

On the VIX Index

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

Following on from a 4.84% gain from Monday, the VIX rose by 7.91% to end the day at 21.31.

The NASDAQ slipped by 0.56%, with the Dow and the S&P500 ending the day down by 0.78% and by 0.85% respectively.

VIX 190521 Daily Chart

The Day Ahead

It’s a quieter day ahead on the European economic data front. Finalized April inflation figures for the Eurozone are due out later today.

Barring any marked upward revisions from prelim figures, however, the numbers should have a muted impact on the majors.

From the U.S, there are no material stats to distract the markets, with the focus likely to be on the FOMC meeting minutes due out after the European close.

Market jitters over a marked pickup in inflationary pressure linger and the markets will be looking for further assurance of status quo from the minutes. For the European majors, a degree of uncertainty over the minutes could be a drag.

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

European Equities: Eurozone GDP and Trade Data in Focus

Economic Calendar:

Tuesday, 18th May

Eurozone GDP (YoY) (Q1) – 2nd Estimate

Eurozone GDP (QoQ) (Q1) – 2nd Estimate

Eurozone Trade Balance (Mar)

Wednesday, 19th May

Eurozone Core CPI (YoY) (Apr) Final

Eurozone CPI (MoM) (Apr) Final

Eurozone CPI (YoY) (Apr) Final

Friday, 21st May

French Manufacturing PMI (May) Prelim

French Services PMI (May) Prelim

German Manufacturing PMI (May) Prelim

German Services PMI (May) Prelim

Eurozone Manufacturing PMI (May) Prelim

Eurozone Markit Composite PMI (May) Prelim

Eurozone Services PMI (May) Prelim

The Majors

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

The CAC40 and the DAX30 fell by 0.28% and by 0.13% respectively, with the EuroStoxx600 ending the day down by 0.05%.

There were no major stats from the Eurozone to provide the majors with direction at the start of the week.

The lack of stats left economic data from China to drag on demand for riskier assets.

In April, industrial production rose by just 9.8% year-on-year compared with 14.1% in March. Retail sales figures also disappointed, with sales up by 17.7% year-on-year. This was well below a 34.2% rise in March.

Adding to the market angst on the day was a renewed rise in new COVID-19 cases across the Asian region.

For the European majors, the downside was limited, however, with optimism towards the economic outlook continuing to deliver support.

The Stats

Economic data was limited to finalized April inflation figures from Italy that had a muted impact on the majors.

From the U.S

It was a quiet day on the economic calendar on Monday. Manufacturing data from NY State was in focus late in the European session.

In May, the NY Empire State Manufacturing Index fell from 26.3 to 24.3. In April, the Index had climbed from 17.4 to 26.3.

While down marginally, new orders continued to see a marked increase as did unfilled orders.

On the inflation front, both input prices and selling prices rose at a record-setting pace.

While employment levels grew more modestly, firms remained optimistic and expected significant increases in both employment and prices.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. BMW and Volkswagen rose by 0.67% and by 0.50% respectively, with Daimler ending the day up by 0.19%. Continental bucked the trend, however, falling by 0.21% on the day.

It was a bearish day for the banks. Deutsche Bank and Commerzbank ended the day with losses of 0.66% and 0.26% respectively.

From the CAC, it was a mixed day for the banks. BNP Paribas slipped by 0.11%, while Credit Agricole and Soc Gen saw gains of 0.12% and 0.36% respectively.

It was a bullish day for the French auto sector, however. Stellantis NV rallied by 1.63%, with Renault gaining 0.84%.

Air France-KLM fell by 0.80%, with Airbus SE sliding by 2.68% on the day.

On the VIX Index

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

Partially reversing an 18.68% slide from Friday, the VIX rose by 4.84% to end the day at 19.72.

The NASDAQ fell by 0.38%, with the Dow and the S&P500 ending the day down by 0.16% and by 0.25% respectively.

VIX 180521 Daily Chart

The Day Ahead

It’s a busier day ahead on the European economic data front. 2nd estimate GDP numbers and March trade data for the Eurozone will be in focus later this morning.

While trade data will draw interest, expect any revisions to the GDP figures to be key.

From the U.S, economic data is limited to housing sector data that should have a muted impact on the majors.

The Futures

In the futures markets, at the time of writing, the Dow Mini down up by 13 points.

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

European Equities: A Quiet Economic Calendar Leaves Stats From China and the U.S in Focus

Economic Calendar:

Monday, 17th May

Italian CPI (MoM) (Apr) Final

Tuesday, 18th May

Eurozone GDP (YoY) (Q1) – 2nd Estimate

Eurozone GDP (QoQ) (Q1) – 2nd Estimate

Eurozone Trade Balance (Mar)

Wednesday, 19th May

Eurozone Core CPI (YoY) (Apr) Final

Eurozone CPI (MoM) (Apr) Final

Eurozone CPI (YoY) (Apr) Final

Friday, 21st May

French Manufacturing PMI (May) Prelim

French Services PMI (May) Prelim

German Manufacturing PMI (May) Prelim

German Services PMI (May) Prelim

Eurozone Manufacturing PMI (May) Prelim

Eurozone Markit Composite PMI (May) Prelim

Eurozone Services PMI (May) Prelim

The Majors

It was a bullish end to the week for the European majors on Friday, with the DAX30 and CAC40 managing to reverse losses from earlier in the week.

The CAC40 and the DAX30 rose by 1.54% and by 1.43% respectively, with the EuroStoxx600 ending the day up by 1.19%.

There were no major stats from the Eurozone to provide the majors with direction at the end of the week.

Market optimism towards a sharp economic recovery returned as EU member states look to reopen borders for the summer.

From the U.S, while retail sales figures disappointed in April, record savings rates amongst consumers also pointed to a marked pickup in consumption down the road. This was coupled with further assurances by the FED that policy would remain unchanged near-term, which supported demand for riskier assets.

The Stats

Economic data was limited to finalized April inflation figures from Spain that had a muted impact on the majors.

From the U.S

It was a busier day on the economic calendar on Friday. Retail sales, consumer sentiment, and industrial production figures were in focus.

It was a mixed bag on the data front.

Consumer sentiment weakened in May. According to prelim figures, the Michigan Consumer Sentiment Index fell from 88.3 to 82.8 with the consumer expectations index falling from 82.7 to 77.6.

Retail sales stalled in April, after having surged by 10.7% in March. Core retail sales unexpectedly fell by 0.8% after a 9% increase in March,

While the numbers were disappointing, an upward trend in the personal saving rate across the U.S suggests a marked pickup in spending in the months ahead.

This eased market concerns over a possible tightening of the purse strings through the summer. According to the bea, the personal saving rate jumped by 27.6% in March.

Industrial production was on the rise once more in April. Following a 2.4% increase in March, production was up 0.7%, month-on-month. Year-on-year, production was up 16.49%.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Friday. BMW and Daimler rallied by 2.83% and by 2.71% respectively. Continental and Volkswagen weren’t far behind, ending the day with gains of 2.41% and 2.59% respectively.

It was also a bullish day for the banks. Deutsche Bank rose by 1.93%, with Commerzbank rallying by 3.65%.

From the CAC, it was a bullish day for the banks. BNP Paribas and Soc Gen ended the day up by 1.75% and by 1.56% respectively. Credit Agricole rose by a more modest 0.76% on the day.

It was also a bullish day for the French auto sector. Stellantis NV rose by 1.41%, with Renault rallying by 3.26%.

Air France-KLM and Airbus SE saw solid gains of 3.64% and 3.72% respectively.

On the VIX Index

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

Following on from a 16.17% decline on Thursday, the VIX slid by 18.68% to end the day at 18.81.

The NASDAQ rallied by 2.32%, with the Dow and the S&P500 ending the day up by 1.06% and by 1.49% respectively.

VIX 170521 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the European economic calendar. Finalized April inflation figures from Italy are due out.

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

From the U.S, NY Empire State Manufacturing figures for May will draw interest later in the day, however.

Ahead of the European open, fixed asset investment, industrial production, and retail sales figures from China will set the tone.

The Futures

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

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

The Week Ahead – Economic Data, Central Bank Policy Meeting Minutes, and Geopolitics in Focus

On the Macro

It’s a busier week ahead on the economic calendar, with 64 stats in focus in the week ending 21st May. In the week prior, 49 stats had been in focus.

For the Dollar:

In the 1st half of the week, NY Empire State Manufacturing and housing sector figures are due out.

Expect May’s manufacturing numbers to garner the greatest interest early in the week.

After a quiet Wednesday, the focus will shift to Philly FED Manufacturing and weekly jobless claim figures.

While both sets of numbers are key, we can expect the jobless claim figures to have a greater impact on the Dollar.

At the end of the week, prelim private sector numbers and existing home sales figures are due out.

Expect May’s prelim Services PMI to have the greatest influence on the Dollar and market risk sentiment.

On the monetary policy front, the FOMC meeting minutes on Wednesday will be key. Any chatter on inflation will be of greatest interest.

In the week, the Dollar ended the week up by 0.10% to 90.321.

For the EUR:

It’s a busier week on the economic data front.

On Tuesday, 2nd estimate GDP numbers for the Eurozone will provide the EUR with direction.

Trade figures for March are also due out but will likely have a muted impact on the EUR>

On Wednesday, finalized April inflation figure for the Eurozone are due out ahead of a busy Friday.

Prelim private sector PMIs for France, Germany, and the Eurozone wrap things up at the end of the week.

The big question will be whether the momentum can continue going into the summer… A pickup in service sector activity will be needed.

The EUR ended the week down by 0.21% to $1.2141.

For the Pound:

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

Employment and inflation figures are due out on Tuesday and Wednesday.

With the markets expect a near-term pickup in inflationary pressures, the employment figures will be key.

On Thursday, CBI Industrial Trend Orders will draw interest ahead of a particularly busy Friday.

At the end of the week, retail sales and prelim private sector PMI numbers for May are due out.

Expect the retail sales and services PMI figures to have the greatest impact on the Pound.

The Pound ended the week up by 0.81% to $1.4097.

For the Loonie:

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

Key stats in the week include April inflation figures on Wednesday and March retail sales figures on Friday.

Following the BoC’s hawkish outlook, expect the retail sales figures to have the greatest influence on the Loonie.

Early in the week, housing starts and foreign securities purchases are also due out but will likely have a muted impact.

The Loonie ended the week up 0.24% to C$1.2104 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s another relatively quiet week ahead.

Key stats include consumer sentiment and wage growth figures mid-week. Both sets of numbers will be of influence.

The focus will then shift to April employment figures on Thursday. Expect plenty of Aussie Dollar sensitivity to the numbers on Thursday.

From elsewhere, economic data from China and private sector PMIs from the Eurozone, Asia, and the U.S will also influence.

On the monetary policy front, the RBA Meeting Minutes on Tuesday will also provide the Aussie with direction.

The Aussie Dollar ended the week down by 0.93% to $0.7771.

For the Kiwi Dollar:

It’s a quiet week ahead.

Wholesale inflation figures for the 1st quarter are due out on Wednesday. With the markets expecting a pickup in input prices, we don’t expect too much influence from the numbers. Any softer than forecasted numbers would test support for the Kiwi, however.

The Kiwi Dollar ended the week down by 0.38% to $0.7250.

For the Japanese Yen:

It is a busy week ahead.

1st quarter GDP numbers and finalized industrial production figures for March are due out on Tuesday and Wednesday.

Expect the GDP numbers to garner the greatest interest.

On Thursday, trade data for April will also provide the Yen with direction.

At the end of the week, April inflation figures should have a muted impact on the Yen, however. Prelim private sector PMIs for May will draw interest, however.

The Japanese Yen fell by 0.69 to ¥109.35 against the U.S Dollar.

Out of China

It’s a busier week ahead.

Fixed asset investment, industrial production, retail sales, and unemployment figures are due out on Monday.

Expect the retail sales and industrial production figures to have the greatest influence on market risk sentiment at the start of the week.

The Chinese Yuan ended the week down by 0.06% to CNY6.4371 against the U.S Dollar.

Geo-Politics

While there are no major risks to consider, the markets will need to continue to eye U.S – China relations.

The markets will also need to monitor events in the Middle East in the week ahead.

The Weekly Wrap – U.S Inflation Figures Refueled Market Fears of a FED Policy Shift

The Stats

It was a quieter week on the economic calendar, in the week ending 14th May.

A total of 49 stats were monitored, following 57 stats from the week prior.

Of the 49 stats, 28 came in ahead forecasts, with 16 economic indicators coming up short of forecasts. There were 5 stats that were in line with forecasts in the week.

Looking at the numbers, 27 of the stats reflected an upward trend from previous figures. Of the remaining 22 stats, 18 reflected a deterioration from previous.

For the Greenback, a marked pickup in inflationary pressures delivered support. In the week ending 14th May, the Dollar Spot Index rose by 0.10% to 90.321. In the previous week, the Dollar had declined by 1.15% to 92.230.

Out of the U.S

It was a mixed set of numbers from the U.S.

Early in the week, April inflation figures sent riskier assets into the deep red.

The core annual rate of inflation accelerated from 1.6% to 3.0% in April. Fueling fears of a shift in FED monetary policy.

On Thursday, the weekly jobless claims figures were upbeat. In the week ending 7h May, initial jobless claims fell from 507k to 473k. This was the lowest reading since the start of the pandemic back in March 2020.

At the end of the week, retail sales, consumer confidence, and industrial production figures delivered mixed results.

In April, retail sales were flat following a 10.7% jump in March, with core retail sales falling by 0.8%, month-on-month. In March, core retail sales had risen by 9.0%.

Economists had forecast a 0.7% rise in core retail sales and a 1% increase in retail sales.

Prelim consumer sentiment figures also disappointed. In May, the consumer sentiment index fell from 88.3 to 82.8 versus a forecasted increase to 90.4.

While falling short of forecasts, industrial production did rise further, however. In April, production increased by 0.7% following a 2.4% rise in March.

In the equity markets, the NASDAQ slid by 2.34%, with the Dow and the S&P500 seeing losses of 1.14% and 1.39% respectively.

Out of the UK

It was a relatively busy week.

Early in the week, retail sales impressed, supporting the optimistic economic outlook.

In April, the BRC Retail Sales Monitor increased by 39.6% year-on-year. In March, sales had risen by 20.3%.

Mid-week, the focus shifted to 1st quarter GDP and industrial and manufacturing production figures.

The stats were also skewed to the positive.

In the 1st quarter, the UK economy contracted by 1.5%, quarter-on-quarter. Compared with the 1st quarter of 2020, the economy contracted by 6.1%. The contraction in the 1st quarter was less severe than had been forecasted.

Production figures were upbeat at the end of the quarter. In March, manufacturing production increased by 2.1%, with industrial production rising by 1.8%.

While the stats influenced, market optimism towards the UK economic outlook continued to support the Pound.

In the week, the Pound rose by 0.81% to end the week at $1.4097. In the week prior, the Pound had risen by 1.17% to $1.3984.

The FTSE100 ended the week down by 1.21%, partially reversing a 2.29% gain from the previous week.

Out of the Eurozone

Early in the week, investor confidence and economic sentiment figures were in focus.

The stats were skewed to the positive, with both investor and economic sentiment figures aligned with market optimism.

In May, the Eurozone’s Sentix Investor Confidence Index surged from 13.1 to 21.0.

The more influential ZEW Economic Sentiment figures for Germany and the Eurozone also impressed.

Germany’s ZEW Economic Sentiment Indicator jumped from 70.7 to 84.4, with the Eurozone’s climbing from 66.3 to 84.0.

Mid-week, industrial production figures for the Eurozone and finalized inflation figures for France and Germany were also in focus.

In the month of April, German consumer prices increased by 0.7%, following a 0.7% rise in March. This was in line with prelim figures.

At the turn of the quarter, the annual rate of inflation picked up from 1.7% to 2.0% according to finalized figures. This was in line with prelim figures.

French consumer prices increased by 0.1%, which was down from a prelim 0.2%. Consumer prices had risen by 0.6% in the month of March. The annual rate of inflation ticked up from 1.1% to 1.2% in April.

In March, Eurozone industrial production rose by 0.1%, month-on-month, following a 1.2% decline from April. Economists had forecast a 0.7% increase.

When compared with March 2020, industrial production was up by 10.9%, falling short of a forecasted 11.6 increase. In February, production had fallen by 1.8% year-on-year.

For the week, the EUR slipped by 0.21% to $1.2141. In the week prior, the EUR had risen by 1.21% to $1.2166.

The CAC40 and the EuroStoxx600 fell by 0.01% and by 0.54% respectively, while the DAX30 ended the week up by 0.11%.

For the Loonie

It was a quiet week.

Manufacturing and wholesale sales figures for March were in focus at the end of the week.

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

While the stats had a muted impact on the Loonie, BoC Governor Macklem pegged back the Loonie.

Following the BoC’s hawkish sentiment, Macklem looked to ease market expectations of a near-term rate hike. Macklem clarified that interest rates would remain unchanged until inflation was sustainably at the 2% target.

In the week ending 14th May, the Loonie rose by 0.24% to C$1.2104. In the week prior, the Loonie had risen by 1.26% to C$1.2100.

Elsewhere

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

In the week ending 14th May, the Aussie Dollar fell by 0.93% to $0.7771, with the Kiwi Dollar ending the week down by 0.38% to $0.7250.

For the Aussie Dollar

It was a quiet week.

Economic data included business confidence and finalized retail sales figures.

A marked pickup in business confidence delivered Aussie Dollar support early in the week.

The NAB Business Confidence Index increased from 15.0 to 26.0.

While revised down from prelims, retail sales rose by 1.3% in March, which was also Aussie Dollar positive. In February, retail sales had fallen by 0.8%.

The stats were not enough to deliver a weekly gain for the Aussie Dollar, however.

For the Kiwi Dollar

It was also a quiet week.

Early in the week, electronic card retail sales impressed, rising by 4% in April.

Business PMI figures reflected a softening in private sector activity, however. In April, the Business PMI fell from 63.6 to 58.4. While back down to sub-60 levels, it was the 2nd highest PMI since July 2020.

For the Japanese Yen

It was also a quiet week.

Household spending figures were in focus early in the week, which were skewed to the positive.

In March, household spending jumped by 7.2%, following a 2.4% rise in the month of February. Year-on-year, spending was up by 6.2%. In February, spending had been down by 6.6% when compared with February 2020.

The Japanese Yen fell by 0.69% to ¥109.35 against the U.S Dollar. In the week prior, the Yen had risen by 0.65% to ¥108.60.

Out of China

It was a relatively quiet week on the data front.

Inflation figures for April were in focus early in the week.

Aligned with market expectations, inflationary pressures were on the rise going into the 2nd quarter.

The annual rate of inflation picked up from 0.4% to 0.9% in April. Wholesale inflation figures pointed to a further pickup near-term. The producer price index increased by 6.8%, year-on-year, which was up from a 4.4% rise in March.

In the week ending 14th May, the Chinese Yuan slipped by 0.06% to CNY6.4371. In the week prior, the Yuan had risen by 0.64% to CNY6.4332.

The CSI300 rose by 2.29%, while the Hang Seng ended the week down by 2.04%.

European Equities: A Week in Review – 14/05/21

The Majors

It was a choppy week for the European majors in the week ending 14th May. After hitting record highs early in the week, the EuroStoxx600 fell by 0.54%, with the CAC ending the week down by 0.01%.

The DAX30 managed to fully recover from heavy losses to end the week up by a modest 0.11%.

Economic data from the Eurozone took a back seat in the week. Concerns over the effect of a sharp pickup in inflationary pressures on FED monetary policy had weighed on riskier assets.

Market optimism towards a more rapid economic recovery across the Eurozone and corporate earnings delivered support, however.

News of member states across the Eurozone planning to reopen borders this coming summer fueled optimism in the week.

On the monetary policy front, assurances from the FED that there would be no shift in policy also delivered support at the end of the week.

The Stats

Early in the week, investor confidence and economic sentiment figures were in focus.

The stats were skewed to the positive, with both investor and economic sentiment figures aligned with market optimism.

In May, the Eurozone’s Sentix Investor Confidence Index surged from 13.1 to 21.0.

The more influential ZEW Economic Sentiment figures for Germany and the Eurozone also impressed.

Germany’s ZEW Economic Sentiment Indicator jumped from 70.7 to 84.4, with the Eurozone’s climbing from 66.3 to 84.0.

Mid-week, industrial production figures for the Eurozone and finalized inflation figures for France and Germany were also in focus.

In the month of April, German consumer prices increased by 0.7%, following a 0.7% rise in March. This was in line with prelim figures.

At the turn of the quarter, the annual rate of inflation picked up from 1.7% to 2.0% according to finalized figures. This was also in line with prelim figures.

French consumer prices increased by 0.1%, which was down from a prelim 0.2%. Consumer prices had risen by 0.6% in the month of March. The annual rate of inflation ticked up from 1.1% to 1.2% in April, however.

In March, Eurozone industrial production rose by 0.1%, month-on-month, following a 1.2% decline from April. Economists had forecast a 0.7% increase.

When compared with March 2020, industrial production was up by 10.9%, falling short of a forecasted 11.6 increase. In February, production had fallen by 1.8% year-on-year.

From the U.S

It was a quieter week on the data front.

Early in the week, April inflation figures sent riskier assets into the deep red.

The core annual rate of inflation accelerated from 1.6% to 3.0% in April. Fueling fears of a shift in FED monetary policy.

On Thursday, the weekly jobless claims figures were upbeat, however. In the week ending 7h May, initial jobless claims fell from 507k to 473k. This was the lowest level since the start of the pandemic back in March 2020.

At the end of the week, retail sales, consumer confidence, and industrial production figures failed to influence.

In April, retail sales were flat following a 10.7% jump in March, with core retail sales falling by 0.8%, month-on-month. In March, core retail sales had risen by 9.0%.

Economists had forecast a 0.7% rise in core retail sales and a 1% increase in retail sales.

Prelim consumer sentiment figures also disappointed. In May, the consumer sentiment index fell from 88.3 to 82.8 versus a forecasted increase to 90.4.

While falling short of forecasts, industrial production did rise further, however. In April, production increased by 0.7% following a 2.4% rise in March.

The Market Movers

From the DAX, it was a bullish week for the auto sector. Daimler rose by 1.13%, with Continental and Volkswagen gaining 0.49% and 0.43% respectively. BMW eked out a 0.08% gain for the week.

It was also a bullish week for the banking sector. Deutsche Bank rose by 2.07%, with Commerzbank rallying by 15.86%.

From the CAC, it was another bullish week for the banks. Soc Gen led the way once more, rallying by 4.78%, with BNP Paribas and Credit Agricole ending the week with gains of 4.13% and 3.57% respectively.

It was a mixed week for the French auto sector, however. Stellantis NV rose by 0.01%, while Renault ended the week down by 2.20%.

Air France-KLM slipped by 0.24%, while Airbus rose by 1.22%.

On the VIX Index

It was back into the green for the VIX in the week ending 14th April. Marking just a 4th weekly gain in 11-weeks, the VIX rose by 12.70%. Reversing a 10.32% fall from the previous week, the VIX ended the week at 18.81.

3-days in the green from 5 sessions, which included a 26.33% jump on Wednesday, delivered the upside in the week for the VIX.

For the week, the NASDQ slid by 2.34%, with the Dow and the S&P500 ending the week down by 1.14% and by 1.39% respectively.

VIX 150521 Weekly Chart

The Week Ahead

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

On Tuesday, 2nd estimate GDP numbers and March trade data for the Eurozone will draw interest.

Expect any revisions to the Eurozone’s GDP numbers to be key.

On Wednesday, finalized Eurozone inflation figures for April will be in focus ahead of a busy Friday.

At the end of the week, prelim private sector PMIs for France, Germany, and the Eurozone will be key drivers.

The markets will be looking for sustained momentum in the economic recovery. A pickup in service sector activity will be key to support the market optimism.

From the U.S, manufacturing sector figures from NY State and Philly will be in focus.

Key stats of the week, however, will be jobless claim figures on Thursday and prelim private sector PMIs on Friday.

Other stats in the week include industrial production, fixed asset investment and retail sales figures from China. From the stats due out on Monday, expect the industrial production figures to have the greatest impact on the majors.

European Equities: Another Quiet Economic Calendar Leaves U.S Stats In Focus Once More

Economic Calendar:

Friday, 14th May 2021

Spanish CPI (YoY) (Apr) Final

Spanish HICP (YoY) (Apr) Final

The Majors

It was a mixed session for the European majors on Thursday, which had seen just minor gains on the day prior.

The EuroStoxx600 fell by 0.20%, while the CAC40 and the DAX30 ending the day up by 0.14% and by 0.33% respectively. All three had been in the deep red early in the session in response to the U.S sell-off on Wednesday.

Inflation reality and the fear of a shift in FED monetary policy had left the majors on the backfoot earlier the day.

Market optimism towards a speedy economic recovery and the continued easing of lockdown measures provided much-needed support, however.

Better than expected jobless claim figures from the U.S also delivered support later in the session.

The Stats

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

From the U.S

Wholesale inflation and weekly jobless claim figures were in focus late in the session.

Following April inflation figures on Wednesday, however, it was the weekly jobless claim figures that were key.

In the week ending 7th May, initial jobless claims fell from 507k to a post-pandemic low 473k. Economists had forecast a decline to 490k.

Initial jobless claims had peaked at 6,648k back in the final week of March 2020 at the onset of the pandemic.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. Volkswagen rallied by 1.47%, with Continental gaining by 0.14%. BMW and Daimler saw modest losses of 0.62% and by 0.30% respectively, however.

It was a bullish day for the banks. Deutsche Bank and Commerzbank ended the day with gains of 1.51% and 0.06% respectively.

From the CAC, it was a bearish day for the banks. Credit Agricole fell by 1.36%, with BNP Paribas and Soc Gen ending the day down by 0.95% and by 0.29% respectively.

It was another bearish day for the French auto sector. Stellantis NV fell by 0.49%, with Renault declining by 0.93%.

Air France-KLM and Airbus SE ended the day with losses of 1.66% and 0.58% respectively.

On the VIX Index

A run of three consecutive days in the green came to an end for the VIX on Thursday.

Partially reversing a 26.33% rise from Wednesday, the VIX slid by 16.17% to end the day at 23.13.

The NASDAQ rose by a modest 0.72%, with the Dow and the S&P500 ending the day up by 1.29% and by 1.22% respectively.

VIX 140521 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the European economic calendar. Finalized April inflation figures from Spain are due out.

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

From the U.S, retail sales, industrial production, and consumer sentiment figures will influence later in the session, however.

Expect the retail sales figures to be key.

The Futures

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

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

European Equities: Another Quiet Economic Calendar Leaves U.S Economic Data in Focus

Economic Calendar:

Friday, 14th May 2021

Spanish CPI (YoY) (Apr) Final

Spanish HICP (YoY) (Apr) Final

The Majors

It was a partial recovery of Tuesday’s sell-off for the European majors on Wednesday.

The EuroStoxx600 rose by 0.36%, with the CAC40 and the DAX30 ending the day up by 0.19% and by 0.20% respectively.

Upbeat market sentiment towards the economic outlook provided a cushion for the broader European markets mid-week.

With stats on the lighter side, better than corporate earnings and GDP numbers from the UK fueled market optimism.

The upside came in spite of a sharp acceleration in U.S inflation that weighed on the U.S majors on Wednesday.

The Stats

German Inflation

In the month of April, consumer price increased by x%, following a 0.7% rise in March. This was in line with prelim figures.

At the turn of the quarter, the annual rate of inflation picked up from 1.7% to 2.0% according to finalized figures. This was in line with prelim figures.

According to Destatis,

  • Compared with a year earlier, energy prices jumped by 7.9%, following a 4.8% rise in March 2021.
  • Food prices increased by 1.9%.
  • Prices for mobile phones slid by 8.3%, however.
  • Excluding energy product prices, the rate of inflation would have been 1.4% in April.
  • Prices for services were up 1.6% in April 2021 compared with the same month in 2020. Net rents exclusive of heating expenses rose by 1.3%.

French Inflation

In the month of April, consumer prices increased by 0.1%, which was down from a prelim 0.2%. Consumer prices had risen by 0.6% in the month of March.

According to Insee.Fr,

  • Prices for manufactured goods fell by 0.1% after a 1.6% increase in March.
  • Energy prices fell by 0.4% after a 2.2% jump in March.
  • While tobacco prices were stable, food prices increased by 0.6% in the month.
  • Prices for services grew by 0.1%.
  • The annual rate of inflation ticked up from 1.1% to 1.2% in April.
  • Energy prices jumped by 8.8% after being up by 4.7% in March, with prices for services up 1.2%.
  • Prices for manufactured goods held steady, while food prices fell by 0.3%.

Eurozone Industrial Production

In March, industrial production rose by 0.1%, month-on-month, following a 1.2% decline from April. Economists had forecast a 0.7% increase.

When compared with March 2020, industrial production was up by 10.9%, falling short of a forecasted 11.6 increase. In February, production had fallen by 1.8% year-on-year.

According to Eurostat,

  • Compared with Feb-2021, production of non-durable consumer goods rose by 1.9%, and energy by 1.2%.
  • The production of intermediate goods rose by 0.6%, while the production of capital goods fell by 1.0%.
  • For durable consumer goods, production fell by 1.2% in the month.
  • When compared with Mar-2020, production of durable consumer goods jumped by 34.4%.
  • There were also marked increases in the production of capital goods (+16.1%) and intermediate goods (+13.3%).
  • Energy production rose by 3.3%, while the production of non-durable goods increased by just 0.7%.

By member state, industrial production in Italy rose by 37.7%, year-on-year, to lead the way.

From the U.S

Inflation figures were in focus late in the session.

In April, core consumer prices jumped by 0.9%, following a 0.3% increase in March. More significantly, the core annual rate of inflation accelerated from 1.6% to 3.0%. Economists had forecast a core annual rate of inflation of 2.3%.

Month-on-month, consumer prices rose by 0.8%, following a 0.6% increase in March. Economists had forecast for consumer prices to increase by 0.2%.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. Volkswagen slid by 2.65%, with Continental declining by 1.43%. BMW and Daimler saw modest losses of 0.40% and by 0.15% respectively.

It was a bullish day for the banks, however. Deutsche Bank rose by 0.92%, while Commerzbank jumped by 8.56% off the back of better-than-expected earnings.

From the CAC, it was a bullish day for the banks. Soc Gen rallied by 2.08%, with BNP Paribas and Credit Agricole ending the day up by 1.43% and by 1.53% respectively.

It was another bearish day for the French auto sector, however. Stellantis NV fell by 0.53%, with Renault following Tuesday’s 6.44% slide with a 1.25% loss.

Air France-KLM and Airbus SE ended the day with modest gains of 0.49% and 0.69% respectively.

On the VIX Index

It was a third consecutive day in the green for the VIX on Wednesday.

Following on from an 11.09% rise on Tuesday, the VIX jumped by 26.33% to end the day at 27.59.

The NASDAQ slid by 2.67%, with the Dow and the S&P500 ending the day down by 1.99% and by 2.14% respectively.

VIX 130521 Daily Chart

The Day Ahead

It’s a particularly quiet day ahead on the European economic calendar. There are no material stats for the markets to consider.

From the U.S, wholesale inflation and jobless claim figures will influence later in the day.

With the European majors having managed to avoid a pullback in response to U.S inflation figures on Wednesday, the fall across the U.S markets on Wednesday will likely influence early on.

The Futures

In the futures markets, at the time of writing, the Dow Mini up by 98 points, while the DAX was down by 53 points.

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