Economic data of China and Germany at a glance
It was a relatively bullish weekend for the European majors on Friday.
The DAX and EuroStoxx600 gained 0.39% and 0.37% respectively, with the CAC40 gaining 0.12%.
While disappointing eurozone economic data has pegged the majors, it was statistics from the United States that provided the direction.
A resumption of wage growth and an increase in the non-farm wage bill provided support. For the Fed, a more modest rise than Thursday’s ADP numbers may have eased the pressure for more immediate movement. This has also been positive for riskier assets, with market concern over the need for an immediate Fed move for now.
It was a quieter day on the economic data front. The Eurozone’s retail sales figures were the center of attention.
In April, retail sales fell 3.1% month over month, reversing most of a 3.3% increase from March. Economists were forecasting a more modest drop of 1.2%.
According to Eurostat,
- The volume of retail trade fell 5.1% for non-food products and 2.0% for food, beverages and tobacco.
- However, automotive fuel sales rose 0.4%.
- Slovenia (-10.4%) and France (-6.0%) recorded the largest declines in April.
- Portugal (+ 4.3%), Latvia (+ 3.8%), and Lithuania (+ 3.7%) recorded the largest increases in April.
- Compared with April 2020, retail trade had jumped 23.9%.
- Year-over-year sales of automotive fuels jumped 65.5%, non-food products by 42.6% and food, beverages and tobacco by a modest 3.3%.
- Luxembourg (+ 46.1%) and France (+ 42.1%) recorded the strongest annual increases in retail trade.
The United States
It was, however, a busier day on the economic calendar.
Non-farm payrolls only increased by 559,000 in May, well below ADP figures. Economists had forecast an increase of 650,000 after April’s modest rise of 278,000.
A fall in the participation rate and an increase in the wage bill have supported a fall in the unemployment rate.
In May, the US unemployment rate fell from 6.1% to 5.8%. However, that was not enough to continue to support the tapering bets.
For the DAX: Friday was a mixed day for the automotive sector. Bmw rose 0.96% to reverse the trend. Continental decreased by 0.06%, with Daimler and Volkswagen ending the day down 0.40% and 0.46% respectively.
It was a bearish day for the banks. German Bank and Commercial bank ended the day with losses of 0.81% and 1.09% respectively.
From CAC, it was a mixed day for the banks. BNP Paribas and Gen Soc decreased by 0.57% and 0.86% respectively, while Agricultural credit increased by 0.32%.
It was a mixed day for the French automotive sector. Stellantis SA recovered by 2.80%, while Renault fell 1.95%.
Air France-KLM followed Thursday’s 4.64% drop with a 2.43% loss, while Airbus SE achieved a gain of 0.13%.
On the VIX index
He was back in the red for the VIX on Friday, scoring just a 2sd fall in 5 sessions.
Reversing a 3.20% gain from Thursday, the VIX fell 8.98% to end the day at 16.42.
The NASDAQ rebounded 1.47%, with the Dow Jones and S & P500 ending the day up 0.52% and 0.88% respectively.