It will be another testy day for the European majors. There are no material stats to consider, leaving COVID-19 and geopolitics in focus.
It was a 3rd consecutive day in the red for the European majors on Thursday. The CAC40 fell by 1.21%, with the DAX30 and EuroStoxx600 declining by 0.04% and 0.77% respectively.
Rising COVID-19 cases across the U.S continued to weigh on demand for riskier assets.
It was a relatively quiet day on the Eurozone economic calendar on Thursday. Germany’s trade data for May were in focus ahead of the European open.
According to Destatis, Germany’s trade surplus widened from €3.4bn to 7.6bn in May. Economists had forecast a widening to €5.2bn.
Exports increased by 9.0% in May, partially reversing a 24% slump in April. Economists had forecast a 13.8% rise.
Imports rose by 3.5%, following a 16.6% slide in April. Economists had forecast a 12% rise.
Compared with May 2019
Germany exported goods to the value of €42.4bn (-29.0%) to EU member states.
Exports to Eurozone member states fell by 29.1% to €29.9bn.
Germany exported goods to the value of €37.7bn (-30.5%) to countries outside of the EU.
Germany imported goods to the value of €38.4bn (-25.2%) from EU member states.
Imports from Eurozone member states fell by 25.2% to €26.7bn.
Germany’s imports from non-EU countries fell by 17.5% to €34.8bn.
From the U.S
The all-important weekly jobless claims figures were in focus late in the European session. In the week ending 3rd July, initial jobless claims rose by 1.314m. While this was better than a forecasted 1.375m and previous week 1.413m, it was still sizeable.
The Market Movers
For the DAX: It was a bearish day for the auto sector on Thursday. Continental and Daimler fell by 1.31% and by 2.73% to lead the way down. BMW and Volkswagen saw more modest losses of 0.74% and 0.09% respectively.
It was also a bearish day for the banks. Deutsche Bank fell by 1.99%, with Commerzbank sliding by 4.42%.
WIRECARD AG led the way down with a 9.19% slide coming off the back of a 15.53% tumble from Wednesday.
From the CAC, it was another bearish day for the banks. Soc Gen slid by 3.57%, with BNP Paribas and Credit Agricole falling by 2.31% and 2.33% respectively.
The French auto sector saw yet more losses, with Peugeot and Renault declining by 2.28% and by 1.91% respectively.
Things were no better for Air France-KLM and Airbus SE which fell by 2.26% and by 3.96% respectively.
On the VIX Index
It was back into the green for the VIX on Thursday. Following a 4.59% fall from Wednesday, the VIX rose by 4.20% to end the day at 29.26.
COVID-19 did the damage on Thursday, which overshadowed the better than expected jobless claims figures.
The S&P500 and Dow fell by 0.56% and by 1.39% respectively, while the NASDAQ rose by 0.53%.
The Day Ahead
It’s a particularly quiet day ahead on the Eurozone economic calendar. There are no material stats to provide the European majors with direction.
A lack of stats will leave the majors in the hands of geopolitics and COVID-19 at the end of the week.
On Thursday, this optimism had wavered as new COVID-19 cases continued to rise across the U.S. A similar trend from Thursday will be another test for the bulls.
From the U.S
It’s also a relatively quiet day on the economic calendar, with wholesale inflation figures for June due out later today.
We don’t expect the figures to have any influence on the majors on the day, however.
The Latest Coronavirus Figures
On Thursday, the number of new coronavirus cases rose by 213,647 to 12,376,273. On Wednesday, the number of new cases had risen by 222,368. The daily increase was lower than Wednesday’s rise while higher than 190,716 new cases from the previous Thursday.
Germany, Italy, and Spain reported 1,190 new cases on Thursday, which was up from 986 new cases on Wednesday. On the previous Thursday, 1,027 new cases had been reported.
From the U.S, the total number of cases rose by 59,638 to 3,218,570 on Thursday. On Wednesday, the total number of cases had increased by 62,416. On Thursday, 2nd July, a total of 48,853 new cases had been reported.
In the futures markets, at the time of writing, the Dow was up by 117 points.