European Equities: Futures Point to the Red. COVID-19 and Geopolitics Are in Focus

The Majors

It was a relatively bullish day for the European majors on Monday, with the EuroStoxx600 rising by 0.32% to lead the way. The CAC40 and the DAX30 saw more modest gains of 0.18% and 0.15% respectively.

A lack of stats from the Eurozone left the majors without direction on the day. Travel stocks continued to bear the brunt of the market’s wrath following the UK’s decision to add France to its quarantine list.

From the weekend, a decision to postpone the U.S – China trade talks had no impact on the majors. The postponement would give China time to further ramp up in the import of products as outlined within the phase 1 trade agreement.

There were concerns over the latest spike in new COVID-19 cases, however, which could derail the economic recovery.

The Stats

It was a particularly quiet day on the Eurozone economic calendar. There were no material stats to provide the majors with direction.

From the U.S

Economic data included August’s NY State Empire State Manufacturing Index, which fell from 17.2 to 3.7. Economists had forecast a decline to 15.0.

According to the August survey,

• New orders were little changed, while shipments increased modestly.
• Unfilled orders declined, with inventories also falling.
• Employment inched higher, however, though the average workweek declined.
• Firms remained optimistic that conditions would improve over the next 6-months. In spite of this, optimism fell for a 2nd consecutive month.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Monday. Daimler and Volkswagen rose by 0.68% and by 0.35% respectively, while Continental and. BMW fell by 1.60% and by 0.21% respectively.

It was also a bearish day for the banks. Deutsche Bank fell by 0.49%, with Commerzbank declining by 1.32%.

From the CAC, it was a bearish day for the banks. Credit Agricole fell by 1.09% to lead the way down, with BNP Paribas and Soc Gen seeing losses of 1.00% and 0.50% on the day.

It was also a bearish day for the French auto sector. Peugeot and Renault fell by 0.50% and by 0.63% respectively.

Air France-KLM slid by a further 3.56% following Friday’s 5.78% tumble. Airbus SE declined by a more modest 0.93% on the day.

On the VIX Index

It was a 4th consecutive day in the red for the VIX on Monday. A 3.17% fall marked an 11th day in the red out of 12. Following on from a 0.36% decline on Friday, the VIX ended the day at 21.35.

The S&P500 and NASDAQ saw gains of 0.27% and by 1.00% respectively, while the Dow fell by 0.31%.

On the day, a lack of progress towards an agreement on the COVID-19 stimulus package pinned back the majors.

There was also U.S – China tension to consider after Trump issued an executive order for ByteDance to sell TikTok within 90-days.

The Day Ahead

It’s another particularly quiet day ahead on the Eurozone economic calendar. There are no material stats to provide the European majors with direction.

A lack of stats will leave the European majors in the hands of COVID-19, geopolitics, and the U.S COVID-19 stimulus package.

From the U.S, housing sector figures for July will likely have a muted impact on the majors later in the day.

The Futures

In the futures markets, at the time of writing, the DAX was down by 11 points, while the Dow was up by 42 points. #euro##StockMarket##CoronavirusOutbreak#

Reprinted from Fxempire，the copyright all reserved by the original author.