Yahoo Finance

Economic Calendar:

Tuesday, 27^th August

• German GDP (YoY) (Q2) 2nd Estimate

• German GDP (QoQ) (Q2) 2nd Estimate

Wednesday, 28^th August

• GfK German Consumer Climate (Sep)

Thursday, 29^th August

• French Consumer Spending (MoM) (Jul)

• French GDP (QoQ) (Q2)

• Spanish HICP (YoY) (Aug) Prelim

• German Unemployment Change / Rate (Aug)

• German CPI (MoM) (Aug) Prelim

Friday, 30^th August

• German Retail Sales (MoM) (Jul)

• Italian CPI (MoM) (Aug) Prelim

• Eurozone CPI (YoY) (Aug) Prelim

• Eurozone Unemployment Rate (Jul)

The Majors

The European majors saw their first day in the green since last Wednesday, as the markets reacted to trade war chatter on the day.

Leading the way was the CAC40, which rebounded from early losses to end the day up by 0.45%. While the DAX30 was close behind, rising by 0.4%, the EuroStoxx600 ended the day flat.

It was a choppy session that saw the majors in the red early on before rallying to intraday highs by late morning.

U.S President Trump’s latest comments on trade provided much-needed support. Following last week’s escalation that riled the markets, Trump said that trade negotiations were set to continue.

There’s still a long way to go before any kind of agreement is likely, but the change in mood was good enough for the markets.

Also providing support was news of political parties in Italy nearing an agreement to form government ahead of today’s deadline. Failure to form a government would mean a snap general election and more uncertainty for the world’s 8^th largest economy.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Monday. Economic data was limited to Germany’s IFO Business Climate Index figures.

According to the August IFO report,

• The ifo Business Climate Index fell from 95.8 to 94.3, its lowest level since Nov-12.

• German companies were also less satisfied with current conditions and the economic outlook.

• The Current Assessment sub-index fell 99.6 to 97.3, with the Business Expectations Index falling from 92.1 to 91.3.

• By sector, the Business Climate Indexes were all on the slide.

  • The manufacturing sub-index fell from -4.3 to -6.1, with the trade sub-index falling from 1.4 to -2.4.

  • Pessimism in the manufacturing sector reached levels last seen back in 2009.

  • Things were not much better for the service sector, where the index fell from 18 to 13. The ECB placed a lot of hope on support from the services sector. The deterioration in August, weighed by sentiment towards current conditions was ominous.

  • In construction, the sub-index fell from 23.1 to 21.4.

From the U.S, durable goods orders were mixed. While core durable goods orders fell by 0.4% in July, durable goods orders rose by 2.1%.