European Equities: The FOMC Meeting Minutes To Influence Ahead Of U.S Stats Later Today


Friday, 21st May

French Manufacturing PMI (May) Prelim

French Services PMI (May) Prelim

German Manufacturing PMI (May) Prelim

German Services PMI (May) Prelim

Eurozone Manufacturing PMI (May) Prelim

Eurozone Markit Composite PMI (May) Prelim

Eurozone Services PMI (May) Prelim

The Majors

It was a bearish day for the European majors on Wednesday.

The CAC40 and EuroStoxx600 the fell by 1.43% and by 1.51% respectively, with the DAX30 ended the day down by 1.77%.

Economic data was on the lighter side mid-week, leaving the markets to look ahead to the FOMC meeting minutes due out after the European close.

Lingering concerns over inflation and the possible impact on FED monetary policy had pegged the European majors back on Tuesday.

It was much of the same on Wednesday, with finalized inflation figures from the Eurozone doing little to distract the markets.

The Stats

Finalized inflation figures for the Eurozone were in focus on Wednesday.

In April, the annual rate of inflation picked up from 1.3% to 1.6%, which was in line with prelim figures. A year earlier, the annual rate of inflation had been 0.3%.

According to Eurostat,

  • The lowest annual rates of inflation were registered in Greece (-1.1%), Portugal (-0.1%), and Malta (+0.1%).

  • Luxembourg registered the highest annual rate inflation at 3.3%.

The highest contribution to the annual euro area rate of inflation came from:

  • Energy (+0.96 percentage points)

  • Services (+0.37 pp)

  • Food, alcohol, & tobacco (+0.16 pp)

  • Non-energy industrial goods (+0.12 pp)

The annul core rate of inflation softened from 0.9% to 0.7%, however, which worse than a forecasted annual core rate of inflation of 0.8%.

In the month of April, consumer prices rose by a further 0.6%, which was in line with forecasts. In March, consumer prices had risen by 0.9%.

From the U.S

It was a particularly quiet day on the economic calendar on Wednesday. There were no major stats for the markets to consider.

While due out after the European close, the FOMC meeting minutes were a factor through the day. Concerns over any hawkish chatter pegged the majors back.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. Continental and Daimler slid by 2.21% and by 2.00% respectively. BMW and Volkswagen saw relatively modest losses of 0.91% and 0.96% respectively.

It was also a mixed day for the banks. Deutsche Bank rose by 0.07%, while Commerzbank fell by 1.55%.

From the CAC, it was a bearish day for the banks. Credit Agricole slid by 2.62%, with BNP Paribas falling by 1.98%. Soc Gen ended the day down by a more modest 0.65%.

It was also a bearish day for the French auto sector. Stellantis NV fell by 1.60%, with Renault tumbling by 4.22%.

Air France-KLM and Airbus SE returned to the red, with losses of 2.30% and 2.14% respectively.

On the VIX Index

It was a 3rd consecutive day in the green for the VIX on Wednesday.

Following on from a 7.91% gain from Tuesday, the VIX rose by 3.66% to end the day at 22.13.

The NASDAQ slipped by 0.03%, with the Dow and the S&P500 ending the day down by 0.48% and by 0.29% respectively.

The Day Ahead

It’s a quiet day ahead on the European economic calendar. There are no material stats to provide the majors with direction in the early part of the day.

The lack of stats will leave the FOMC meeting minutes from overnight to influence.

From the minutes, the key takeaway was the talk of a possible review of the current asset purchasing program as a result of the sharp economic recovery and optimistic outlook.

Later in the day, Philly FED Manufacturing and weekly initial jobless claim figures will also influence.

The markets will be looking for claims to fall back to sub-400k levels to fuel another upward move.

The Futures

In the futures markets, at the time of writing, the Dow Mini down by 90 points.

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

This article was originally posted on FX Empire