European Equities: A Quiet Economic Calendar Leaves the Majors in the Hands of the U.S Markets

From China, trade data had provided some support ahead of the European open.

In August, China’s trade surplus widened from US$56.56bn to US$58.35bn versus a forecasted narrowing to US$51.05bn. Exports were up 25.6%, year-on-year, with imports up 33.1%. In July, exports had been up by 19.3% and imports up by 28.1%. Both sets of figures came in ahead of forecasts.

The Stats

German industrial production and Eurozone 2^nd quarter GDP numbers were in focus. ZEW Economic Sentiment figures for Germany and the Eurozone also influenced, however.

Industrial Production

In July, industrial production rose by 1.0%, reversing a 1.0% fall from June. Economists had forecast a 0.9% increase.

According to Destatis,

• Production in industry excl. energy and construction was up 1.3%.
• Within industry, the production of capital goods increased 3.2%, with the production of consumer goods up 0.9%.
• By contrast, the production of intermediate goods fell by 0.5%.
• Outside industry, energy production was down 3.2%, while production in construction increased 1.1%.

The Eurozone Economy

In the 2^nd quarter, the Eurozone economy grew by 2.2%, quarter-on-quarter, which was up from 2^nd estimate 2.0%. The economy had contracted by 0.3% in the previous quarter.

Year-on-year, the economy grew by 14.3%, which was up from a 2^nd estimate 13.6%. In the 1^st quarter, the economy had contracted by 1.3%.

Economic Sentiment

In August, the Germany’s ZEW Economic Sentiment Index slid from 40.4 to 26.5, with the Eurozone’s falling from 42.7 to 31.1. The numbers were enough to weigh on the majors as the continued spread of the Delta variant added further uncertainty.

From the U.S

There were no stats to influence the majors later in the session.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. Volkswagen slid by 1.11% to buck the trend on the day. BMW and Continental both rose by 0.68% respectively, with Daimler ending the day up by 0.41%.

It was a bullish day for the banks, however. Deutsche Bank and Commerzbank saw gains of 0.74% and 3.44% respectively.

From the CAC, it was a relatively bullish day for the banks. BNP Paribas and Credit Agricole rose by 0.39% and by 0.21% respectively, with Soc Gen ending the day up by 0.62%.

It was a bearish day for the French auto sector, however. Stellantis NV slid by 2.46%, with Renault down by 1.39%.

Air France-KLM slipped by 0.28%, with Airbus SE falling by 1.54%.

On the VIX Index

After having ended the day flat on Friday, the VIX rose by 10.54% on Tuesday to end the day at 18.14. The U.S markets were closed on Monday.

On Tuesday, the NASDAQ rose by 0.07%, while the Dow and S&P500 fell by 0.76% and by 0.34% respectively.

The Day Ahead

It’s a quieter day ahead on the Eurozone’s economic calendar.

French nonfarm payrolls are due out ahead of the European open. We don’t expect too much influence from the numbers, however.

With stats on the lighter side, expect the majors to take their cues from the U.S markets ahead of tomorrow’s ECB policy decision.

From the U.S, it’s another quiet day ahead on the economic calendar. JOLT’s job openings, due out late in the session, will draw some interest, however.

The Futures

In the futures markets, at the time of writing, the Dow Mini was down by 2 points.

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