European Equities: A Week in Review – 19/03/21


The Majors

It was a mixed week for the European majors in the week ending 19th March.

The CAC40 fell by 0.80%, while the DAX30 and EuroStoxx600 ended the week gains of 0.82% and 0.06% respectively.

Impressive economic data from China set the tone at the start of the week.

Adding to the upside in the week were positive stats from the Eurozone and the FOMC’s economic projections mid-week.

COVID-19 vaccine woes and fresh rises in new COVID-19 cases dragged the CAC40 into the red for the week, however.

Late in the week, France announced new lockdown measures as a result of a spike in new cases. Low vaccination rates and supply issues remain a concern near-term.

The Stats

It was a relatively busy week on the economic data front, with the German and Eurozone economies back in focus.

Early in the week, ZEW Economic Sentiment figures for Germany and the Eurozone drew attention.

Germany’s Economic Sentiment Index rose from 71.2 to 76.6, with the Eurozone’s climbing from 69.6 to 74.0.

Wage growth figures for the Eurozone were also positive for the EUR, while trade data disappointed.

In January, the Eurozone’s trade surplus narrowed from €29.2bn to just €6.3bn.

At the end of the week, German wholesale inflation figures delivered some support.

Other stats in the week included finalized inflation figures for France, Italy, and the Eurozone. These had a muted impact on the EUR and the European majors, however.

From the U.S

It was a busier week on the economic data front.

Key stats included retail sales and industrial production figures in the first half of the week.

The stats were skewed to the negative with retail sales taking a hit in February and industrial production hitting reverse.

On Thursday, jobless claims figures also disappointed, while Philly FED Manufacturing numbers for March impressed.

Initial jobless claims rose from 725k to 770k in the week ending 12th March.

Impressive numbers from Philly softened the blow, with the index surging to a 50-year high 51.8 in March.

While the stats drew plenty of attention, the FED monetary policy decision, press conference, and FOMC projections were the main event.

FED Chair Powell continued to stand by his promise of low for longer, with projections pointing to no likely rate hike until at least 2023.

This was in spite of a forecasted surge in economic growth and a bounce back in inflation.

The Market Movers

From the DAX, it was a bullish week for the auto sector. Volkswagen surged by 17.35% to lead the way, with BMW rallying by 6.02%. Continental and Daimler ended the week with gains of 4.58% and 3.77% respectively.

It was another mixed week for the banking sector. Deutsche Bank rose by 0.09%, while Commerzbank fell by 3.80%.

From the CAC, it was a mixed week for the banks. BNP Paribas and Credit Agricole fell by 3.64% and by 1.70% respectively, while Soc Gen rose by 1.88%.

It was a bearish week for the French auto sector. Renault and Stellantis NV ended the week with losses of 3.73% and 2.46% respectively.

Air France-KLM and Airbus ending the week down by 2.11% and by 2.66% respectively.

On the VIX Index

It was a back into the green for the VIX in the week ending 19th March. Following an 16.10% slide from the previous week, the VIX rose by 1.26% to end the week at 20.95.

For the week, the Dow fell by 0.46%, with NASDAQ and the S&P500 declining by 0.79% and by 0.77% respectively.

The Week Ahead

It’s a relatively busy week ahead on the economic calendar.

The markets will have to wait until Wednesday, however, for any major stats from the Eurozone.

Prelim private sector PMI figures for France, Germany, and the Eurozone are due out on Wednesday.

Expect plenty of influence from the numbers.

Late in the session on Wednesday, flash Eurozone consumer confidence figures will also draw interest.

Through the second half of the week, German consumer and business sentiment figures will also provide the majors with direction.

On the monetary policy front, expect the ECB’s Economic Bulletin to also garner plenty of interest on Thursday.

From the U.S, the economic calendar is also on the busier side.

Core durable goods and private sector PMI numbers on Wednesday will influence. Expect service sector PMI and core durable goods orders to have the greatest impact.

The focus will then shift to finalized 4th quarter GDP and initial jobless claim figures on Thursday.

Following the FOMC economic projections, however, we don’t expect the GDP numbers to influence as these are now dated.

Core PCE Price Index and personal spending numbers wrap things up on Friday.

This article was originally posted on FX Empire