Friday, European stocks were broadly lower. The Stoxx Europe 600 Index dropped 0.89%, Germany’s DAX 30 fell 0.54%, France’s CAC 40 shed 1.43%, and the U.K.’s FTSE 100 lost 1.54%. EUROPE ADVANCE/DECLINE
66% of STOXX 600 constituents traded lower or unchanged Friday.
28% of the shares trade above their 20D MA vs 30% Thursday (below the 20D moving average).
44% of the shares trade above their 200D MA vs 45% Thursday (below the 20D moving average).

The Euro Stoxx 50 Volatility index eased 1.36pt to 26.66, a new 52w high.

3mths relative high: Financial Services, Utilities
3mths relative low: Telecom., Energy

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Europe Best 3 sectors
real estate, financial services, technology

Europe worst 3 sectors
automobiles & parts, construction & materials, travel & leisure

The 10yr Bund yield fell 4bps to -0.54% (below its 20D MA). The 2yr-10yr yield spread fell 2bps to -19bps (above its 20D MA).

FR 08:50: Jul Markit Manufacturing PMI final, exp.: 52.3
GE 08:55: Jul Markit Manufacturing PMI final, exp.: 45.2
EC 09:00: Jul Markit Manufacturing PMI final, exp.: 47.4
UK 09:30: Jul Markit/CIPS Manufacturing PMI final, exp.: 50.1
FR 10:00: Jul New Car Registrations YoY, exp.: 1.2%
FR 14:00: 12-Mth BTF auction, exp.: -0.56%
FR 14:00: 3-Mth BTF auction, exp.: -0.57%
FR 14:00: 6-Mth BTF auction, exp.: -0.56%

In Asian trading hours, strengthened further, as EUR/USD kept trading at levels below the key 1.1800. GBP/USD remained capped by the 1.3100 level. USD/JPY ran up to a high of 106.43 before retreating to levels below 106.00.

Spot gold was little changed at $1,973 an ounce.

GlaxoSmithKline, a global healthcare company, announced that it and French drug firm Sanofi are in advanced discussions with the European Commission for the supply of up to 300 million doses of a COVID-19 vaccine. The Company added: “The vaccine candidate developed by Sanofi in partnership with GSK, is based on the recombinant protein-based technology used by Sanofi to produce an influenza vaccine, and GSK’s established adjuvant technology. The doses would be manufactured in European countries including France, Belgium, Germany and Italy.”

MTU Aero Engines, a German maker of aircraft engines, reported that 2Q net income slumped to 13 million euros (adjusted net income at 33 million euros) from 103 million euros in the prior-year period. 2Q Adjusted EBIT plunged 76.1% to 42 million euros on revenue of 776 million euros, down 30.2%.

From a daily point of view, the share price is stuck within a falling wedge since June. a break above the falling wedge, would call for a new up leg towards 187.75E and the horizontal resistance of March at 225E in extension. Alternatively, below 135E look for 118.75E and 97.75E in extension.

Societe Generale, France’s third-largest bank, said that it swung to a 2Q net loss of 1.26 euros from a net income of 1.05 billion in the prior-year period. The Bank pointed out: “The Group’s commercial cost of risk (expressed as a fraction of outstanding loans) amounted to 97 basis points in Q2 20, (…) or 1,279 million euros. (…) two non-cash exceptional items (…) a -684 million euros expense in respect of the goodwill impairment of the Global Markets & Investor Services CGU and a -650 million euros expense in respect of the impairment of deferred tax assets.”

Santander, a major Spanish bank, said it is facing a potential Consumer Financial Protection Bureau enforcement action. Details of the potential violations are not available.

Heineken, a major Dutch brewer, reported that it swung to a 1H net loss of 297 million euros from a net income of 936 million euros in the prior-year period. 1H adjusted operating profit slumped to 827 million euros (a 53% organic decline on year) on revenue of 9.24 billion euros (down 16% organically). The Company pointed out that revenue and expenses were significantly impacted by COVID-19. It proposed not paying an interim dividend.

Ferrari: 2Q results expected

Novartis, a Swiss maker of pharmaceutical products, announced that the European Commission has granted the approval for Cosentyx (secukinumab) for the treatment of
moderate-to-severe plaque psoriasis in children and adolescents.

Roche, a Swiss drug giant, reported that the European Commission has granted conditional marketing authorisation for Rozlytrek (entrectinib) for the treatment of patients with solid tumours expressing a neurotrophic tyrosine receptor kinase (NTRK) gene fusion.

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DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.


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