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European Equities: Economic Data and Corporate Earnings in Focus

It’s a busy day ahead on the economic and earnings calendars. The numbers will need to impress to support the majors following weak stats out of China earlier…

Economic Calendar:

Tuesday, 30th April

French GDP (QoQ) (Q1) 1st Estimate

GfK German Consumer Climate (May)

French Consumer Spending (MoM) (Mar)

Spanish GDP (QoQ) (Q1)

German Unemployment Change (Apr)

German Unemployment Rate (Apr)

Italian CPI (MoM) (Apr)

Eurozone GDP q/q (Q1) 1st Estimate / Eurozone GDP y/y (Q1) 1st Estimate

Eurozone Unemployment Rate (Mar)

German CPI (MoM) (Apr)

Wednesday, 1st May

N/A

Thursday, 2nd May

German Retail Sales (MoM) (Mar)

Spanish Manufacturing PMI (Apr)

Italian Manufacturing PMI (Apr)

French Manufacturing PMI (Apr) Final

German Manufacturing PMI (Apr) Final

Eurozone Manufacturing PMI (Apr) Final

Friday, 3rd May

Eurozone Core CPI (YoY) (Apr) Prelim

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Eurozone CPI (YoY) (Apr) Prelim

The Majors

It was a positive start to the week for the European majors. The CAC40 led the way, rising by 0.21%. The DAX and EuroStoxx600 saw more modest gains of 0.1% and 0.08% respectively.

Economic data released through the European session included April economic sentiment and business confidence figures. The Eurozone Economic Sentiment Index fell by 1.6 points to 104. The decline was attributed to lower confidence in industry, retail trade, and construction. Confidence remained unchanged in services. Across the Euro bloc, Spain (-2.6) and Germany (-1.5) recorded the largest falls in confidence.

Things were not much better with the Business Climate Indicator, which fell by 0.12 points to +0.42. The only positive from the report was apparent relief from the export order books.

While the stats out of the Eurozone were skewed to the negative, economic data out of the U.S supported risk appetite.

Inflationary pressures eased further, according to the March Core PCE Price Index, which fell from 1.8% to 1.6%. The latest figures continued to support a possible rate cut in the 4th quarter. While inflation softened, personal spending surged by 0.9% off the back of a 0.1% rise in February.

Following the disappointing consumption figures in the 1st estimate GDP numbers released out of the U.S on Friday, the personal spending boost will be of some relief.

The Winners

The European majors managed to recover from a dip into the red in the early part of the day.

Looking across the majors, Deutsche Bank found support following 2 days of heavy losses, rising by 1.04%. Commerzbank (+2.72%), BNP Paribas (+1.63%) and UniCredit S.p.A (+2.4%) also made solid gains. Support came from the general election result in Spain, where the SPOE were victorious and also from S&P’s affirmation of Italy’s BBB credit rating last week.

The Day Ahead

For the day ahead, it’s a particularly busy day on the economic calendar. 1st quarter GDP numbers for France, Spain and the Eurozone are due out, which will certainly have an influence on the majors. Consumer sentiment and unemployment numbers out of Germany and French consumer spending figures will also be a factor on the day.

From across the Pond, corporate earnings to influence the majors will include earnings from Apple Inc., General Electric Co., General Motors Co., McDonalds Corp., and Pfizer Inc.

On the data front, expect consumer confidence figures out of the U.S to also have an impact later in the session.

At the time of writing, the futures were pointing to a mixed open. The DAX30 was down by 12 points, while the CAC40 was pointing to a 17point rise at the open.

Earlier in the day, disappointing private-sector PMI numbers out of China weighed on risk appetite. wThe DAX tends to be more sensitive to China’s numbers.

This article was originally posted on FX Empire

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