In This Article:
Economic Calendar:
Friday, 30th August
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German Retail Sales (MoM) (Jul)
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Italian CPI (MoM) (Aug) Prelim
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Eurozone CPI (YoY) (Aug) Prelim
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Eurozone Unemployment Rate (Jul)
The Majors
It was back in the green for the European majors on Thursday. Leading the way was the CAC40, which rallied by 1.51%. The DAX30 and EuroStoxx600 weren’t far behind, with gains of 1.18% and 1.04% respectively.
U.S Treasury yields were on the rise, providing support to the European majors, as trade optimism returned to the markets.
In spite of the improved optimism, the 10-yr – 2-year U.S Treasury yield curve remained inverted at the day’s end.
The improved sentiment towards trade came off the back of comments from Beijing. From Beijing, the government said that it was willing to resolve the trade war in a calm manner. Beijing also confirmed that the September face-to-face trade talks were still on. From Washington, the U.S President also stated that there had been calls with Beijing.
There’s still a long way to go, however. Much will depend on whether the U.S will be willing to remove existing tariffs to allow negotiations to progress.
The Stats
It was a busy day on the Eurozone economic calendar on Thursday.
From France, consumer spending rose by 0.4% in July, coming in ahead of a forecast of 0.3%. In June, spending had fallen by 0.2%. Also positive was an upward revision to GDP numbers. The French economy grew by 0.3% in the 2nd quarter, quarter-on-quarter, revised from 0.2%. Economists had forecast a 0.2% growth.
From Germany, unemployment increased by 4,000, which was in line with forecast. The marginal increased left Germany’s unemployment rate at 5% in August. On the negative side, German consumer prices fell by 0.2% in August, according to prelim figures, which was worse than a forecasted 0.1% fall. In July, consumer prices had risen by 0.5%.
From Spain, inflation figures were also disappointing. The annual rate of inflation eased from 0.5% to 0.3%, which was worse than a forecasted 0.4%. The annual rate of core inflation eased from 0.6% to 0.4%, which was also worse than a forecast of 0.6%.
From the U.S, there were no major shocks to rock the boat. The U.S economy grew by 2% in the 2nd quarter, which was softer than the 1st estimate 2.1%. This was in line with forecast, however.
On the trade front, the goods trade deficit narrowed from $74.16bn to $72.34bn.
The Market Movers
From the DAX, ThyssenKrupp led the way, supported by the shift in trade sentiment, with a 4.16% gain. Germany’s auto sector also found support. Volkswagen led the way, rising by 1.28%. Continental (+1.12%), Daimler (+1.00%) and BMW (+0.99%) weren’t far behind.