Economic Calendar

Thursday, 1^st July

Spanish Manufacturing PMI (Jun)

Italian Manufacturing PMI (Jun)

French Manufacturing PMI (Jun) Final

German Manufacturing PMI (Jun) Final

Eurozone Manufacturing PMI (Jun) Final

Eurozone Unemployment Rate (May)

Friday, 2^nd July

German Retail Sales (MoM) (May)

The Majors

It was a bearish day for the European majors on Wednesday, reversing Tuesday’s modest gains.

The DAX30 led the way down, falling by 1.02%, with the CAC40 and the EuroStoxx600 seeing losses of 0.91% and 0.77% respectively.

Economic data from China, the Eurozone, and the U.S were all in focus through the day.

From China, NBS private sector PMI figures for June disappointed. The NBS Manufacturing PMI slipped from 51.0 to 50.9, with the Non-Manufacturing PMI falling from 55.2 to 53.5.

The weaker figures had weighed on the DAX futures ahead of the European open

Through the early part of the week, the markets remained torn. Market optimism towards a speedier economic recovery continued to provide support.

Concerns over the rising number of new Delta variant COVID-19 cases weighed, however.

The Stats

In June, the annual rate of inflation ticked up from 1.4% to 1.5% based on prelim figures. This was in line with forecasts.

According to Insee.fr,

• Prices for energy were up 10.9%, with prices for tobacco rising by 5.3% year-on-year.

• Food prices were down by 0.3%, with prices for fresh food (-3.4%) weighing.

• Month-on-month, consumer prices increased by 0.2% after having risen by 0.3% in May.

German Unemployment

In June, unemployment fell by 38k, following on from a 19k decline in May. Economists had forecast a more modest 20k fall. In spite of the larger than expected drop, the unemployment rate held steady at 5.9%.

The Eurozone

According to prelim figures for the Eurozone, the annual rate of inflation softened from 2.0% to 1.9% in June. Month-on-month, consumer prices rose by 0.3% following a 0.3% increase in May.

From the U.S

ADP nonfarm employment change numbers were in focus.

In June, the ADP reported a 692k increase in nonfarm payrolls, following an 886k surge in May. Economists had forecast a 450k rise.

Chicago PMI and pending home sales figures were also in focus but had a muted impact on the European majors.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Wednesday. Continental and Volkswagen slid by 2.49% and by 2.18% to lead the way down. BMW and Daimler ended the day down by 1.61% and by 0.97% respectively.

It was also a bearish day for the banks. Deutsche Bank fell by 0.22%, with Commerzbank declining by 1.45%.

From the CAC, it was a bearish day for the banks. BNP Paribas and Credit Agricole fell by 1.31% and by 1.24% respectively. Soc Gen saw a more modest 0.92% loss on the day.