European Equities: Eurozone Industrial Production and Geopolitics in Focus

Economic Calendar:Wednesday, 12th August

Italian CPI (MoM) (Jul) Final

Eurozone Industrial Production (MoM) (Jun)

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Thursday, 13th August

German CPI (MoM) (Jul) Final

Spanish CPI (YoY) (Jul) Final

Spanish HICP (YoY) (Jul) Final

Friday, 14th August

French CPI (MoM) (Jul) Final

French HICP (MoM) (Jul) Final

Eurozone GDP (YoY) (Q2) 2nd Estimate

Eurozone GDP (QoQ) (Q2) 2nd Estimate

Eurozone Trade Balance (Jun)

[fx-article-ad]The Majors

It was a particularly bullish day for the European majors on Tuesday. The CAC40 rallied by 2.41% to lead the way, with the DAX30 and EuroStoxx600 gaining 2.04% and 1.68% respectively.

Solid economic data from China and continued hope of a speedier economic recovery fuelled demand for riskier assets on the day.

From the U.S, Trumps executive orders from the weekend and hopes of a stimulus package by the end of the week continued to add support.

With the markets in buoyant mood, news from Russia of Putins approval for the first COVID-19 vaccine was also positive.

The Stats

It was a relatively quiet day on the Eurozone economic calendar. Key stats included Augusts ZEW Economic Sentiment figures for Germany and the Eurozone.

According to the latest report,

• Germanys Indicator of Economic Sentiment rose from 59.3 to 71.5, coming in well above a forecasted 58.0.

• The Eurozones indicator increased by 4.4 points to 64.0.

From the U.S

A pickup in wholesale inflationary pressures supported the European majors later in the session.

In July, the Producer Price Index increased by 0.6%, coming in ahead of a forecasted 0.3% rise. In June, the PPI had fallen by 0.2%.

The Market Movers

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For the DAX:It was a bullish day for the auto sector on Tuesday. Continental rallied by 7.19% to lead the way for a 2nd consecutive day. BMW, Daimler, and Volkswagenalso found strong support with gains of 4.41%, 2.02%, and 3.40% respectively.

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Car sales figures from China delivered the auto sector with the boost on Tuesday.

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It was also a bullish day for the banks. Deutsche Bankrose by 1.52%, with Commerzbank gaining 1.16%.

From the CAC, it was a bullish day for the banks. BNP ParibasandCredit Agricolerallied by 4.68% and by 4.85% respectively, withSoc Gen gaining 3.69%.

The French auto sector also found strong support, with Peugeotand Renault rallying by 5.83% and by 4.11% respectively.

Air France-KLMtrailed the front runners, rising by 2.83%, while Airbus SErallied by 5.72%.

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On the VIX Index

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A run of 7 consecutive days in the red came to an end on Tuesday, with the VIX rising by 8.59%. Reversing a 0.36% decline from Monday, the VIX ended the day at 24.03.

For the S&P500, a run of 7 consecutive days in the green came to an end, as tech stocks weighed on the broader market.

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While the markets had found support from further chatter on COVID-19 vaccines, uncertainty over the COVID-19 stimulus package remained.

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There was also the rise in tension between the U.S and China for the markets to consider ahead of trade talks later this week.

The S&P500 and Dow fell by 0.80% and by 0.38% respectively, while the NASDAQ slid by 1.69%.

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The Day Ahead

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It‘s another relatively quiet day ahead on the Eurozone economic calendar. Key stats include June’s industrial production figures for the Eurozone and finalized July inflation figures for Italy.

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Barring particularly dire numbers the stats should have a muted impact on the majors.

From the U.S, July inflation figures are in focus late in the European session.

Away from the economic calendar, geopolitics, and updates from Capitol Hill will also be in focus.

The Futures

In the futures markets, at the time of writing, the DAX was down by 115.5 points, while the Dow was up by 48 points.

For a look at all of todays economic events, check out our economic calendar.