Wednesday, 16th June
Eurozone Wages in euro zone (YoY) (Q1)
Thursday, 17th June
Eurozone Core CPI (YoY) (May) Final
Eurozone CPI (MoM) (May) Final
Eurozone CPI (YoY) (May) Final
It was another bullish day for the European majors on Tuesday, with the EuroStoxx600 now having avoided the red for 8 sessions.
The CAC40 and the DAX30 rose by 0.35% and by 0.36% respectively, with the EuroStoxx600 gaining 0.11%.
A narrowing of the Eurozone’s trade surplus and disappointing retail sales figures from the U.S failed to weigh on the majors.
Market optimism towards the economic outlook ahead of tonight’s FOMC monetary policy decision and projections delivered support.
With some degree of uncertainty over the Committee’s stance on tapering, however, the upside was limited.
While there is uncertainty ahead of tonight’s decision, the ECB’s assurances have also provided the majors with support.
It was a busier morning on the economic calendar, with finalized inflation figures for France, Germany, and Italy in focus. Trade data from the Eurozone was the key stat of the day, however.
In April, the Eurozone’s trade surplus narrowed from €15.8bn to €10.9bn. Economists had forecast a narrowing to €14.4bn.
According to Eurostat,
- Exports to the rest of the world was up 43.2% to €135.3bn in April when compared with April 2020.
- Imports from the rest of the world increased 37.4%, year-on-year, to €133.0bn.
- In April 2020, the trade surplus had stood at €2.3bn.
- Intra-euro area trade rose to €178.9bn in April 2021, up by 61.9% compared with April 2020.
In May, German consumer prices increased by 0.5%, which was in line with forecasts. German consumer prices had risen by 0.7% in April.
From France, consumer prices increased by 0.3% in May, which was also in line with forecasts. In April, consumer prices had risen by 0.1%.
In Italy, consumer prices stalled in May after having risen by 0.4% in April. This was also in line with forecasts.
While the numbers were mixed for the month of May, all three member states reported in a pickup in the annual rate of inflation.
Germany’s annual rate of inflation accelerated from 2.0% to 2.5%, with France’s ticking up from 1.2% to 1.4%.
In spite of consumer prices stalling in May, Italy’s annual rate of inflation picked up from 1.1% to 1.3%.
From the U.S
It was a busy day on the economic calendar, wholesale inflation and retail sales were the key stats of the day.
In May, the core producer price index rose by 0.7%, after a 0.7% increase in April. Economists had forecast a 0.5% rise.
Retail sales fell by 1.30%, however, after having risen by 0.9% in April. Core retail sales fell by 0.7% following a 0.8% decline from April.
Other stats included industrial production figures, manufacturing sector data from NY State, and inventory numbers.
These stats had a muted impact on the majors, however, ahead of tonight’s FOMC.
The Market Movers
For the DAX: It was a mixed day for the auto sector on Tuesday. Volkswagen slid by 2.64%, with Continental and BMW ending the day down by 1.05% and by 0.36% respectively. Daimler bucked the trend, however, rising by a modest 0.39%.
It was also a mixed day for the banks, however. Deutsche Bank rose by 1.35%, while Commerzbank ended the day flat.
From the CAC, it was a mixed day for the banks. BNP Paribas rose by 0.04%, while Soc Gen fell by 0.44%. Credit Agricole ended the day flat.
It was also a mixed day for the French auto sector. Stellantis NV ended the day flat, while Renault fell by 1.67%.
Air France-KLM fell by 0.85%, while Airbus SE rose by 0.69%.
On the VIX Index
It was a 2nd consecutive day in the green for the VIX on Tuesday.
Following a 4.73% gain from Monday, the VIX rose by 3.84% to end the day at 17.02.
The NASDAQ fell by 0.71%, with the Dow and the S&P500 ending the day down by 0.27% and by 0.20% respectively.
The Day Ahead
It’s a quieter day ahead on the European economic calendar.
Eurozone wage growth figures for the 1st quarter are due out later this morning.
With all eyes on the FED, however, we don’t expect too much influence from the numbers.
From the U.S, housing sector data and import and export price index figures are due out late in the day. We would also expect the markets to brush these aside.
With the FED policy decision and projections due out after the European close, there will likely be some caution…
Ahead of the European open, economic data from China will set the tone. Recent industrial production and retail sales figures have been on the weaker side…
In the futures markets, at the time of writing, the Dow Mini was down by 5 points.
For a look at all of today’s economic events, check out our economic calendar.