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European Equities: A Busy Economic Calendar and Geopolitics in Focus

Economic Calendar:

Friday, 7th August

German Industrial Production (MoM) (Jun)

German Trade Balance (Jun)

French Non-Farm Payrolls (QoQ) (Q2)

The Majors

It was a bearish day for the European majors on Thursday. The CAC40 declined by 0.98% to lead the way, with the DAX30 and EuroStoxx600 falling by 0.54% and by 0.73% respectively.

Corporate earnings and economic data were in focus, along with updates on the U.S COVID-19 stimulus package.

On Capitol Hill, lawmakers failed to come to an agreement on the COVID-19 stimulus package.

Economic data and corporate earnings results failed to deliver a 3rd consecutive day in the green for the CAC40.

The Stats

It was a quieter day on the Eurozone economic calendar. Key stats included June factory orders and July construction PMI figures for Germany.

Factory orders surged by 27.9% in June, following a 10.4% rise in May. Economists had forecast a 10.1% increase.

According to Destatis,

  • Domestic orders jumped 35.3%, while foreign orders increased by 22%.

  • New orders from the euro area went up by 22.3%, with new orders from other countries rising by 21.7%.

  • Manufacturers of intermediate goods saw new orders rose by 10.6%, while manufacturers of capital goods saw new orders surge by 45.7%.

  • Consumer goods manufacturers saw new orders rise by a modest 1.1%

  • For the automotive industry, a 66.5% surge in new orders left new orders down by 12.2% from February.

Germany’s construction PMI rose from 41.3 to 47.1 in July.

From the U.S

Economic data included the all-important weekly jobless claims figures.

In the week ending 31st July, initial jobless claims stood at 1,186k, which was down from 1,434k claims in the previous week. Economists had forecast 1,415k initial jobless claims.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Thursday. BMW and Continental fell by 0.96% and by 1.39% respectively, following Wednesday’s decline. Daimler and Volkswagen recovered from losses to end the day up by 0.89% and by 0.39% respectively.

It was a mixed day for the banks. Deutsche Bank fell by 1.49%, while Commerzbank rose by 0.82%.

From the CAC, it was a bearish day for the banks. Credit Agricole and Soc Gen declined by 1.08% and by 1.29% respectively. BNP Paribas saw a more modest 0.31% loss on the day.

It was also a bearish day for the French auto sector. Peugeot and Renault fell by 1.94% and by 2.07% respectively.

Air France-KLM and Airbus SE bucked the broader trend, however, with gains of 1.87% and 0.53% respectively.

On the VIX Index

It was a 5th consecutive day in the red for the VIX on Thursday. Following on from a 3.24% loss on Wednesday, the VIX fell by 1.48% to end the day at 22.65.

While lawmakers failed to find an agreement, the better than expected jobless claims figures delivered support.

Tech stocks were also on the rise once more, delivering yet another record high for the NASDAQ. Travel stocks also found much-needed support as the U.S lifted travel bans on a number of countries.

The S&P500 and Dow rose by 0.64% and by 0.68% respectively, with the NASDAQ gaining 1.00%.

The Day Ahead

It’s a relatively busy day ahead on the Eurozone economic calendar. Germany’s industrial production and trade data for June are due out later this morning.

Later in the day, French non-farm payroll figures for the 2nd quarter are also due out.

Expect the industrial production figures to have the greatest impact on the day.

While we will expect the numbers to influence, corporate earnings, U.S economic data, and chatter from the Oval Office to also influence.

Ahead of the European open, July trade data from China will set the tone.

From the U.S

It’s a busy day ahead. Key stats include July’s nonfarm payrolls and the unemployment rate.

Following Thursday’s jobless claims figures, expect today’s stats to influence late in the session.

The Futures

In the futures markets, at the time of writing, the DAX was up by 16.5 points, while the Dow was down by 47 points.

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

This article was originally posted on FX Empire

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