Yahoo Finance European Equities: The G20 Summit Kicks Off and Will Drive the Majors
Economic Calendar:
Friday, 28th June
French Consumer Spending m/m (May)
French CPI m/m (June) Prelim
French HICP m/m (June) Prelim
Spanish GDP q/q (Q1)
Italian CPI m/m (Jun) Prelim
Eurozone Core CPI y/y (Jun) Prelim
Eurozone CPI y/y (Jun) Prelim
The Majors
The European majors had a repeat of Wednesday. The DAX30 managed a 2nd consecutive day in the green, rising by 0.21%, while the CAC40 and EuroStoxx600 continued to struggle.
It was a 5th consecutive day in the red for the CAC40, which ended the day with a 0.13% loss, while the EuroStoxx600 ended the day flat.
Both Washington and Beijing delivered statements of intent ahead of the G20 that gets underway today. Comments suggested that neither China nor the U.S has any interest in backing down at this juncture.
The Stats
Economic data out of the Eurozone included prelim June inflation figures out of Spain and Germany and Eurozone business confidence figures.
June inflation figures were mixed on Thursday. Spain’s annual rate of inflation softened from 0.8% to 0.4% in June, while Germany’s annual rate of inflation picked up from 1.4% to 1.6%.
While inflation figures were mixed, business confidence figures disappointed. The Business Confidence Indicator fell from 0.30 to 0.17 in June. According to figures released by the EU Commission, production expectations, coupled with negative sentiment towards overall and export orders books weighed. A deterioration in the level of stocks also contributed to the fall.
Out of the U.S, there were no major shocks. Finalized 1st quarter GDP numbers were in line with 2nd prelims. Initial jobless claims picked up from 217k to 227k, the marginal increase not enough to ruffle the markets’ feathers.
The Market Movers
From the DAX, bank stocks found further support, with Deutsche Bank and Commerzbank rising by 1.94% and by 0.98% respectively. For the auto sector, it was a mixed bag. Continental and Volkswagen saw red, falling by 0.09% and by 0.16% respectively. BMW (+0.74%) and Daimler (+0.58%) managed to end the day in positive territory.
Leading the way on the day was Bayer (“BAYN”), which jumped by 5.19%, with ThyssenKrupp finding further support, up by 2.22%. ThyssenKrupp continued to find support on the possible buyout of its planned elevator business unit. For Bayer, the company announced that it has hired a legal team to battle a lawsuit resulting from its acquisition of Monsanto.
From the CAC, BNP Paribas and Credit Agricole gained 0.68% and 1.16% respectively, while Renault slipped by 0.09%.
The Day Ahead
It’s a busy week ahead.
French consumer spending and finalized Spanish 1st quarter GDP numbers are due out. On the inflation front, French, Italian and the Eurozone’s prelim June inflation figures will also be in focus.
From the U.S, the FED’s preferred Core PCE Price index and personal spending figures are due out ahead of Chicago’s June PMI and finalized consumer sentiment figures.
A shift in sentiment towards a near-term FED rate cut weighed on the majors mid-week. Softer inflation figures would be positive for the majors.
It goes without saying, however, that the stats will play second fiddle once more. Updates from the G20 Summit will be the key driver on the day. Expect a panic sell-off if trade talks go nowhere…
Trump has a vested interest in getting trade talks back on track as he kicks off his presidential election campaign. A recession would certainly suggest that he just doesn’t have the walk to go with the talk…
At the time of writing, the DAX was up by 40.5 points. The Dow Mini was up by 55 points.
This article was originally posted on FX Empire
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