In This Article:
The Majors
It was a relatively bullish week for the European majors in the week ending 14th August. The DAX30 rose by 1.79%, with the CAC40 and EuroStoxx600 ending the week with gains of 1.50% and 1.24% respectively.
For the European majors, 3 consecutive days through the first half of the week delivered the upside.
From the weekend prior, Trump’s signing of executive orders provided support early in the week, along with positive economic data.
Further talk of COVID-19 vaccines also supported risk appetite early in the week, with Russia joining the race to deliver a COVID-19 vaccination.
Later in the week, however, the markets brushed aside economic data, with a lack of progress on Capitol Hill testing risk sentiment.
COVID-19 numbers were also on the rise once more, reigniting fear of an extended 2nd wave of the COVID-19 pandemic. Parts of Europe reported jumps in new cases to sound the alarm bell.
The Stats
It was another busy week on the Eurozone economic calendar.
In the 1st half of the week, August’s ZEW Economic Sentiment figures for Germany and the Eurozone were in focus.
Germany’s ZEW Economic Sentiment Index jumped from 59.3 to 71.5, with the Eurozone’s rising from 59.6 to 64.0 in August.
Mid-week, the Eurozone’s industrial production figures provided support, with a 9% rise coming off the back of a 12.3% jump in May.
At the end of the week, the Eurozone’s 2nd estimate GDP numbers for the 2nd were also in focus.
According to the latest figures, the Eurozone’s economy contracted by 12.1% in the 2nd quarter. This was in line with 1st estimates and forecasts. Year-on-year 2nd estimate GDP was also unchanged at -15%.
At the end of the week, June trade figures for the Eurozone were also positive, with the trade surplus widening from €9.4bn to €21.2bn. The widening failed to support the European majors on the day, however.
July’s finalized inflation figures for France, Germany, and Spain had a muted impact in the week.
From the U.S
It was also a positive week on the economic data front.
Key stats the weekly jobless claims, retail sales, and consumer sentiment figures.
In the week ending 7th August, initial jobless claims fell back from 1,191k to 963k, to mark a 2nd consecutively weekly decline.
Consumer sentiment and expectations improved marginally, with core retail sales and retail sales also on the rise. The gains were relatively modest, however, providing limited support to the European majors.
From Elsewhere
Economic data out of China disappointed at the end of the week, leading to a bearish end to a bullish week. Retail sales declined by a further 1.2% in July, coming up short of a forecasted 0.1% increase. Industrial production also fell well short of forecasts, increasing by 4.8%, year-on-year. Economists had forecasted a 5.10% rise.