In This Article:
The Majors
It was a mixed week for the European majors in the week ending April-8, 2022.
The EuroStoxx600 rose by 0.57%, while the CAC40 and the DAX ended the week with losses of 2.04% and 1.13%, respectively.
Market angst over FED monetary policy and the ongoing Russian invasion of Ukraine weighed on demand for riskier assets.
Economic data from the Eurozone delivered mixed results, which failed to offset market sentiment toward FED monetary policy.
News updates on China’s lockdowns to curb the spread of COVID-19 added to the negative sentiment in the week.
The Stats
It was a busy week, with the markets focused on service sector activity and the German economy.
Stats from Germany delivered mixed results. In February, Germany’s trade surplus widened from €8.9bn to €11.5bn, with industrial production up 0.2%. Factory orders slid by 2.2%, however, to test support.
Service sector PMIs were more upbeat. France and Germany saw service sector activity pickup, while Italy and Spain saw activity moderate. Despite this, the Eurozone’s services PMI rose from 55.5 to 55.6. As a result of disappointing manufacturing numbers, the Eurozone’s composite PMI fell from 55.5 to 54.9.
On Thursday, the ECB monetary policy meeting minutes also drew interest.
In line with expectations, policymakers discussed cutting back on stimulus to curb inflation. Policymakers noted that “three forward guidance conditions for an upward adjustment of the key ECB interest rate had either already been met or were very close to being met.”
Despite the need to curb inflation, the war in Ukraine left policymakers on a more cautious footing.
From the U.S
In the first half of the week, economic data included factory orders and service sector PMIs.
The stats were mixed. Factory orders fell by 0.5% in February, partially reversing a 1.5% rise from January, while service sector activity improved.
In March, the market’s preferred ISM Non-Manufacturing PMI increased from 56.5 to 58.3.
On Thursday, jobless claims were also impressive. In the week ending April-01, initial jobless claims fell from 171k to 166k.
While the stats were market positive, the FOMC meeting minutes weighed. More hawkish than anticipated minutes hit the global equity markets. The minutes revealed plans to begin cutting the FED balance sheet by $95bn per month amidst a rising interest rate environment to curb inflation.
The Market Movers
From the DAX, it was a bearish week for the auto sector. Volkswagen and BMW slid by 2.88% and 2.53%, respectively, with Continental falling by 2.24%. Daimler ended the week with a more modest 0.43% loss.