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A light economic calendar leaves the FED policy in focus

Friday 20th August

German PPI MoM JUL

The majors

It was a particularly bearish day for the European majors on Thursday as the majors headed for a first weekly loss of the month.

The CAC40 lost 2.43%, while the DAX30 and the EuroStoxx600 fell 1.25% and 1.54% respectively.

There were no major statistics from the euro zone to distract the markets.

The FOMC’s overnight meeting minutes on Wednesday and economic data from the US raised the prospect of a short-term move by the Fed.

Nervousness about an imminent throttling by the FED caused the downward movement of the day.

The statistics

There were no major statistics from the euro zone to guide the majors.

From the USA

The focus was on Philly FED Manufacturing and the weekly unemployment claims figures.

In August, the Philadelphia FED Manufacturing Index fell from 21.9 to 19.4. Economists had forecast an increase to 23.0.

More importantly, in the week ending August 13, unemployment claims fell from 377,000 to 348,000. Economists had forecast a decrease to 363,000.

The market movers

For the DAX: It was a bearish day for the auto sector on Thursday. BMW and Daimler slipped 3.12% and 3.37% respectively to lead the way down. Continental and Volkswagen ended the day down 2.13% and 1.81% respectively.

It was a bearish day for the banks too. Deutsche Bank and Commerzbank ended the day with losses of 2.92% and 1.93% respectively.

From the CAC, it was a bearish day for the banks. Soc Gen slipped 3.03%, with BNP Paribas and Credit Agricole ended the day with a minus of 2.68% and 2.05% respectively.

Things didn’t go much better for the French auto sector. Stellantis NV slipped 3.56%, with Renault 2.60% decrease.

Air France-KLM recorded a relatively modest decline of 1.60%, while Airbus SE slipped 3.15%.

On the VIX index

For the VIX on Thursday, it was in the green for the fourth day in a row.

After rising 20.44% on Wednesday, the VIX rose 0.46% to end the day at 21.67.

The NASDAQ and S & P500 rose 0.11% and 0.13%, respectively, while the Dow was down 0.19%.

The story goes on

The day ahead

A relatively calm day is ahead of the euro zone’s economic calendar. The wholesale inflation figures from Germany are published in the early part of the day.

However, we do not expect the numbers to have any influence.

The FOMC members’ talks in front of Jackson Hole and COVID-19 will remain top areas of interest.

The future

On the futures markets, the Dow Mini was 27 points in the red at the time of going to press.

You can find an overview of all today’s economic events in our economic calendar.

This article was originally published on FX Empire

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