It’s a busy day ahead for the markets. U.S – China tensions, the U.S fiscal stimulus passage, COVID-19, and economic data are in focus today.
German Ifo Business Climate Index (Jul)
Thursday, 30th July
German GDP (QoQ) (Q2)
German GDP (YoY) (Q2)
German Unemployment Change (Jul)
German Unemployment Rate (Jul)
Eurozone Unemployment Rate (Jun)
German CPI (MoM) (Jul) Prelim
Friday, 31st July
French GDP (QoQ) (Q2)
German Retail Sales (MoM) (Jun)
French Consumer Spending (MoM) (Jun)
French CPI m/m (Jul) Prelim
French HICP m/m (Jul) Prelim
Spanish GDP (QoQ) (Q2)
Italian CPI (MoM) (Jul) Prelim
Eurozone CPI (YoY) (Jul) Prelim
Eurozone Core CPI y/y (Jul) Prelim
Eurozone GDP q/q (Q2) 1st Estimate
Eurozone GDP y/y (Q2) 1st Estimate
It was a bearish end to the week for the European majors on Friday. The DAX30 slid by 2.02%, with the CAC40 and EuroStoxx600 falling by 1.54% and by 1.70% respectively.
Economic data took a back seat on Friday, with market jitters over the rise in tensions between the U.S and China weighing.
Following Wednesday’s order for China to shut down its Houston consulate, China retaliated on Friday. China revoked the U.S consulate’s license for Cheng Du.
The latest spat comes in the wake of the U.S accusing China of hacking U.S companies.
Adding to the market angst at the end of the week was a continued rise in new COVID-19 cases. There was also a lack of progress on Brexit in the week to test the majors further.
It was a busy day on the Eurozone economic calendar. Key stats included prelim July private sector PMIs for France, Germany, and the Eurozone.
The Eurozone’s manufacturing PMI rose from 47.4 to 51.1, with the services PMI jumping from 48.3 to 55.1.
From France, the manufacturing PMI slipped from 52.3 to 52.0, while the services PMI rose from 50.7 to 57.8.
Out of Germany, the manufacturing PMI rose from 45.2 to 50.0, with the services PMI increasing from 47.3 to 56.7.
Supported by a marked improvement in service sector activity, the Eurozone’s Composite PMI jumped from 48.5 to 54.8.
From the U.S
Service sector activity continued to contract in July, with the PMI rising from 47.9 to 49.6. Economists had forecast a rise to 51.0. The Manufacturing PMI also disappointed, with a rise from 49.8 to 51.3 falling short of a forecasted 51.5.
It was another set of disappointing numbers that came in the wake of Thursday’s 1.416m initial jobless claims.
The Market Movers
For the DAX: It was a mixed day for the auto sector on Friday. Continental rose by 0.55% to buck the trend on the day. It was a bearish day for the rest. BMW and Volkswagen slid by 1.19% and by 1.11% respectively, while Daimler saw a more modest 0.54% loss.
It was also a mixed day for the banks. Deutsche Bank fell by 0.35%, while Commerzbank ended the day with a 1.33% gain.
From the CAC, it was another bearish day for the banks. Soc Gen slid by 2.21% to lead the way down. BNP Paribas and Credit Agricole ended the day down by 1.13% and by 0.87% respectively.
The French auto sector struggled. Peugeot and Renault ended the day with losses of 1.75% and 1.52% respectively.
Air France-KLM and Airbus SE fell by 0.82% and by 2.07% respectively.
On the VIX Index
It was back into the red for the VIX on Friday. Following a 7.24% gain on Thursday, the VIX fell by 0.92% to end the day at 25.84.
Geopolitics and disappointing economic data weighed on the U.S equity markets at the end of the week. Intel also weighed on the Dow, with a 16.24% slide as the markets responded to negative guidance for the 3rd quarter.
The S&P500 and Dow fell by 0.62% and 0.68% respectively, with the NASDAQ seeing a loss of 0.94%.
The Day Ahead
It’s a relatively busy day ahead on the Eurozone economic calendar. Key stats include Germany’s Ifo Business Climate Index figures.
Expect any weak numbers to test the European majors in the early part of the day.
On the geopolitical front, the progress of the EU Recovery Fund will also garner interest.
From the U.S
June’s core durable goods orders will provide direction later in the day.
Away from the economic calendar, the progress of the U.S stimulus package in the U.S and COVID-19 will also influence.
The Latest Coronavirus Figures
According to figures at the time of writing, the number of new coronavirus cases rose by 197,402 to 16,396,849 on Sunday. On Saturday, the number of new cases had risen by 268,668. The daily increase was lower than Saturday’s rise and 246,207 new cases from the previous Sunday.
Germany, Italy, and Spain reported 663 new cases on Sunday, which was up from 646 new cases on Saturday. On the previous Sunday, 491 new cases had been reported.
From the U.S, the total number of cases rose by 50,664 to 4,366,373 on Sunday. On Saturday, the total number of cases had increased by 67,398. On Sunday, 26th July, a total of 65,368 new cases had been reported.
In the futures markets, at the time of writing, the DAX was up by 11 points, with the Dow up by 69 points.