FX Empire

European Equities: U.S Politics, Economic Data, and the ECB Minutes to Influence

Bob Mason
4 min read

In This Article:

Economic Calendar:

Thursday, 8th October

German Trade Balance (Aug)

ECB Monetary Policy Meeting Minutes

The Majors

It was a mixed day for the European majors on Wednesday. The DAX30 rose by 0.17%, whilst the CAC40 and EuroStoxx600 slipped by 0.27% and 0.12% respectively.

Economic data from Germany in the week continued to provide support to the DAX. While industrial production numbers disappointed, more than a 2-year composite PMI for September was good enough.

Market reaction to Trump’s announcement to postpone COVID-19 stimulus bill negotiations weighed, however.

After the European close on Tuesday, Trump had called off negotiations until after the Presidential Election. There mixed signals on Wednesday, however, when Trump tweeted that there would be support for airlines and other stimulus measures. The 2nd tweet led to a rebound in the U.S equity markets on Wednesday.

The Stats

It was a relatively quiet day on the Eurozone economic calendar.

Key stats included August industrial production figures from Germany.

In August, industrial production fell by -0.20%, following a 1.40% rise in July. Economists had forecast a 1.50% increase.

According to Destatis,

  • Production in industry excluding energy and construction was down 0.7%.

  • Within industry, the production of intermediate goods increased by 3.3%. The production of consumer goods fell by 1.3%, with the production of capital goods down by 3.6%.

  • Outside industry, energy production was up by 6.7%, while production in construction was down by 0.3%.

  • Production in the automotive industry slid by 12.5% from the previous month, reversing an 8.9% jump in July. The slide left production just under 25% below the level in Feb-2020.

  • Year-on-year, industrial production was down by 9.6%.

From the U.S

It was a particularly quiet day on the economic calendar. There were no material stats to provide the European majors with direction late in the day.

While there were no stats, the European majors responded to Trump’s decision to end stimulus negotiations until after the election.

The markets had found plenty of support on the hopes that Congress would reach an agreement…

On the monetary policy front, the FOMC meeting minutes were released after the European close. The U.S markets, however, responded to Trump’s tweets of more stimulus that should influence the European majors on Thursday.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Wednesday. Continental and Daimler rallied by 4.10% and by 3.53%. BMW and Volkswagen saw more modest gains of 2.25% and 1.54% respectively.

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