European Equities: Futures Point to a Positive Open as Bargain Hunters Return

Economic Calendar:

Tuesday, 27^th February

German GDP (YoY) (Q4) 2nd Estimate

German GDP (QoQ) (Q4) 2nd Estimate

Wednesday, 26^th February

France Jobseekers Total

Thursday, 27^th February

Spanish HICP (YoY) (Feb) Prelim

Spanish HICP (YoY) (Feb) Prelim

Eurozone Consumer Confidence (Feb) Final

Friday, 28^th February

French Consumer Spending (MoM) (Jan)

French GDP (QoQ) (Q4) 2nd Estimate

German Unemployment Change (Feb)

German Unemployment Rate (Feb)

Italian CPI (MoM) (Feb) Prelim

German CPI (MoM) (Feb) Prelim

The Majors

It was a particularly bearish start to the week for the European majors, with market fear over the spread of the coronavirus doing the damage.

The DAX30 led the way, sliding by 4.01%, with the CAC40 and EuroStoxx600 falling by 3.94% and by 3.79% respectively.

Economic data took a back seat on the day as a spike in cases in South Korea and Italy raised the possibility of a global pandemic.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Monday. Economic data included Germany’s IFO Business Climate Index figures for February.

According to the February survey,

• The IFO Business Climate Index rose from 96.0 to 96.1 in February.

• While sentiment towards the current situation deteriorated, companies were less pessimistic about the next 6-months.

• The IFO Current Assessment sub-index fell from 99.2 to 98.9, while the Business Expectations sub-index rose from 92.9 to 93.4.

The slight uptick had little to no impact on the DAX30 and risk appetite in general, however.

There were also no material stats from the U.S to influence later in the day.

The Market Movers

For the DAX: it was a particularly bearish day for the auto sector on Monday. Daimler led the way tumbling by 6.43%, with Volkswagen down by 5.89%. BMW and Continental saw marginally more modest losses of 5.20% and 4.15% respectively.

It was also a bearish day for the banks. Commerzbank slid by 6.04%, with Deutsche Bank down by 5.74%.

Deutsche Lufthansa also saw red, tumbling by 7.80%, with the spread of the coronavirus particularly bad news for the airline industry.

From the CAC, it was a bearish day for the banks. BNP Paribas slid by 3.80%, with Credit Agricole and Soc Gen falling by 3.35% and by 3.64% respectively.

The auto sector also struggled at the start of the week. Renault slid by 6.63, with Peugeot ending the day down by 6.97%.

Air France-KLM took yet another hit on Monday, sliding by 8.78%.

On the VIX Index

The VIX surged by 46.55% on Monday. Following on from a 9.77% gain on Friday, the VIX ended the day at 25.0.

A particularly bearish day drove the VIX to its highest level since 3^rd January of last year.

Market reaction to the spread of the coronavirus weighed heavily on the global equity markets, with the S&P500 sliding by 3.35%.

The Day Ahead

It’s another relatively quiet day ahead on the Eurozone economic calendar on Tuesday. Economic data includes Germany’s 2^nd estimate GDP numbers for the 4^th quarter.

Expect any revision from 1^st estimates to influence early in the day.

From the U.S, consumer confidence figures will also provide direction, with the futures pointing to a positive open as investors go bargain hunting.

In the futures markets, at the time of writing, the DAX was up by 70.5 points, with the Dow up by 168 points.

This article was originally posted on FX Empire

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