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European Equities: COVID-19 Updates and U.S Stats in Focus

Bob Mason

Economic Calendar:

Thursday, 9th April

German Trade Balance (Feb)

The Majors

It was a mixed day for the European majors on Wednesday. The DAX30 fell by 0.23%, while the CAC40 and EuroStoxx600 rose by 0.10% and 0.02% respectively.

There were no material stats from the Eurozone or the U.S to provide direction on the day, leaving the markets in the hands of the coronavirus numbers.

Throughout the day, there were also updates from an EU Finance Ministers meeting, where member states failed to agree on a stimulus package.

The Stats

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

There were also no stats from the U.S, with the release of the FOMC Meeting Minutes due after the European close.

The Market Movers

For the DAX: It was another bullish day for the auto sector. Continental and Volkswagen led the way, rising by 2.40% and 2.97% respectively. BMW and Daimler saw more modest gains of 0.38% and 1.12% respectively.

It was a bearish day for the banks, however, with Commerzbank and Deutsche Bank falling by 4.06% and by 1.20% respectively.

Deutsche Lufthansa found further support, rising by 0.36% on the day.

From the CAC, it was a mixed day for the banks. BNP Paribas and Credit Agricole rose by 0.77% and 0.24% respectively, while Soc Gen fell by 0.08%

The auto sector struggled on the day, however, with Peugeot and Renault falling by 2.27% and 0.52% respectively.

Air France-KLM also saw red, falling by 0.53%, while Airbus SE continued its recovery with a 4.86% gain on the day.

On the VIX Index

The VIX resumed its downward trend on Wednesday, with a 7.17% loss. Reversing a 3.23% gain from Tuesday, the VIX ended the day at 43.4.

In spite of the continued spread of the virus, the VIX is now down by 49.2% from its 18th March high of 85.5.

We’ve seen the U.S equity markets bounce back off the back of fiscal and monetary policy support. Hopes of a slowdown in the spread of the virus have also provided support, while little attention is being paid to the actual economic fallout.

On Wednesday, the S&P500 rallied by 3.41%, with the Dow and NASDAQ gaining 3.44% and 2.58% respectively.

The Day Ahead

It’s a quiet day ahead on the Eurozone economic calendar, with Germany’s February trade figures in focus.

While we can expect some influence from the numbers, the market focus will remain on COVID-19 updates. Any negative news and we can expect risk aversion to sweep across the markets.

From the U.S, it’s a relatively busy day ahead, with the weekly jobless claims and April consumer sentiment figures due out. Barring particularly dire wholesale inflation numbers, the March figures should have a muted impact this afternoon.

On Wednesday, the total number of coronavirus cases across France, Germany, Italy, and Spain rose by 13,365 to 513,888. In the U.S, the total number of cases increased by 25,965 to 426,300. That took the total number of cases globally to 1,506,361.

While Italy saw another day on day increase in the number of new cases, Spain reported just 1,530 new cases. This was well below Tuesday’s 10,015. France also reported lower numbers on Wednesday after having reported 11,059 cases on Tuesday. For the 4 most-affected member states, the total had risen by 29,916 on Tuesday.

For the U.S, the numbers were also showed a fall in the number of new cases from Tuesday’s 32,950 to 25,965 on Wednesday.

While the figures are good news for the majors, some caution is needed, however, with testing and reporting affecting the numbers each day.

In the futures markets, at the time of writing, the DAX was up by 121 points, with the Dow up by 114 points.

This article was originally posted on FX Empire