Economic Calendar:

Wednesday, 20^th May

German PPI (MoM) (Apr)

Eurozone Core CPI (YoY) (Apr) Final

Eurozone CPI (MoM) (Apr) Final

Eurozone CPI (YoY) (Apr) Final

Eurozone Consumer Confidence Flash

Friday, 22^nd May

French Manufacturing PMI (May) Prelim

French Services PMI (May) Prelim

German Manufacturing PMI (May) Prelim

German Services PMI (May) Prelim

Eurozone Manufacturing PMI (May) Prelim

Eurozone Markit Composite PMI (May) Prelim

Eurozone Services PMI (May) Prelim

The Majors

It was a mixed day for the European majors on Tuesday. The DAX30 rose by 0.15% to buck the trend, while the CAC40 and EuroStoxx600 fell by 0.89% and 0.61% respectively.

Sentiment towards the economy amidst the continued deluge of weak economic data weighed on the majors.

The downside came in spite of progress towards an EU recovery fund and the ongoing easing of lockdown measures.

While optimism continues to support the European majors, a likely slow economic recovery pinned the majors back. There were no catalysts to distract the markets from the harsh realities during the session.

Late in the European session, FED Chair Powell also delivered another reality check, stating that the U.S economy would unlikely recover until the end of 2021.

The Stats

It was a busier day on the Eurozone economic calendar on Tuesday. Key stats included May’s ZEW Economic Sentiment figures for Germany and the Eurozone.

Germany’s Economic Sentiment Index rose from 28.2 to 51.0 in May. In April, the Index had risen from -49.5 to 28.2. The ZEW Current Conditions Index fell from -91.5 to -93.5. In April, the index had fallen from -43.1 to -91.5.

For the Eurozone, the Economic Sentiment Index rose from 25.2 to 46.0 in May. In April, the Index had risen from -49.5 to 25.2.

An improved sentiment towards the economic outlook across economists and analysts provided little support early in the day, however.

From the U.S, economic data included April building permits and housing starts. The stats had a muted impact on the majors, however, with the focus being on FED Chair Powell’s testimony.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Tuesday. Daimler and Volkswagen slid by 1.89% and by 1.43% to lead the way. BMW and Continental weren’t far behind, with losses of 1.08% and 0.97% respectively.

It was a mixed day for the banks, however. While Deutsche Bank fell by 0.37%, Commerzbank rose by a further 5.17% following Monday’s breakout.

Deutsche Lufthansa struggled on the day, with a 1.17% loss.

From the CAC, it was a bearish day for the banking sector on Tuesday. Soc Gen slid by 4.76%, with BNP Paribas and Credit Agricole ending the day with losses of 0.93% and 2.77% respectively.