European Equities: A Week in Review

The Stats

It was a busy 1st half of the week on the economic data front.

The German economy was in focus.

In April, German factory orders (-0.20%) and industrial production (-1.00%) unexpectedly fell, following solid gains in March.

A modest increase in Germany’s trade surplus also disappointed, falling short of forecasts.

Economic sentiment figures from Germany and the Eurozone were also skewed to the negative. Sentiment towards the German and the Eurozone economies weakened marginally in June.

The numbers were not enough to spook the markets ahead of Thursday’s ECB policy decision and press conference.

Providing support in the early part of the week were finalized 1st quarter GDP numbers for the Eurozone.

Quarter-on-quarter, the Eurozone economy contracted by a modest 0.3%, revised up from a prelim 0.6% contraction.

In the 2nd half of the week, the focus was on the ECB and the all-important press conference.

Upward revisions to growth and inflation for this year raised the prospects of a possible nearer-term tapering. The lack of chatter on tapering, however, limited the damage. The ECB’s inflation forecasts also pointed to easing inflationary pressures in 2022 and 2023, which also a positive for the majors.

From the U.S

JOLT’s job openings and trade data were in focus early in the week.

The stats were skewed to the positive. In April openings jumped from 8.288m to 9.286m, with April’s trade deficit narrowing from $75.0bn to $68.9bn.

While the stats were market positive, there was limited impact on the broader markets.

The focus was on the weekly jobless claims and inflation figures due out on Thursday.

Also skewed to the positive, the annual core rate of inflation accelerated from 3.0% to 3.8%.

Core consumer prices and consumer prices continued to rise in the month of May and by more than had been expected.

Initial jobless claim figures were also positive but perhaps not impressive enough to force the FED into action. In the week ending 4th June, initial jobless claims fell from a revised 405k to 376k. Economists had forecast a decline to 370k.

At the end of the week, prelim consumer sentiment figures wrapped things up, with sentiment improving in June.

The Market Movers

From the DAX, it was a mixed week for the auto sector. Volkswagen slid by 2.59% to buck the trend. BMW and Daimler ended the week up by 0.31% and by 0.25% respectively. Continental led the way, however, rising by a 1.65%.

It was a bearish week for the banking sector. Deutsche Bank and Commerzbank slid by 5.88% and by 3.98% respectively.

From the CAC, it was a mixed week for the banks. Credit Agricole rose by 0.49%, while BNP Paribas and Soc Gen saw losses of 1.66% and 0.72% respectively.

It was also a mixed week for the French auto sector. Stellantis NV fell by 0.23%, while Renault rallied by 7.46%.

Air France-KLM and Airbus ended the week up by 1.29% and by 2.15% respectively.

On the VIX Index

It was a 3rd consecutive week in the red for the VIX in the week ending 11th June. Following a 2.03% decline from the week prior, the VIX fell by 4.69% to end the week at 15.65.

2-days in the red from 5 sessions, which included an 10.01% fall on Thursday delivered the downside in the week.

For the week, the Dow fell by 0.80%, while the NASDAQ and the S&P500 ended the week up by 1.85% and by 0.41% respectively.

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