Apr 10 ,2024
Synopsis:
European equity markets closed mixed to mostly higher on Wednesday but Stoxx Europe 600 well off session highs after the US CPI print. March headline CPI came in at 0.4%, ahead of consensus for 0.3% and unchanged m/m. Annualized headline of 3.5% up from last month's 3.2% and above forecast for 3.4%. Core CPI (ex-food and energy) rose 0.4% m/m, hotter than consensus 0.3% though unchanged from last month's 0.4% rise. Annualized core came in at 3.8% above 3.7% consensus and unchanged from last month. Equities sharply dropped upon the data release as market has been increasingly worried about Fed cut prospects after hotter CPI readings in January and February. Markets cut June rate cut odds to under 30% from nearly 60% before the print.
Looking ahead to other macro catalysts this week, ECB decision tomorrow and BoE also due to publish Bernanke's policy review on Friday. Survey by UK regulator FCA showed signs that Britain's cost-of-living crisis easing. Fits in more upbeat outlook in recent consumer confidence data. Opposition Labour Party continues to prepare for a general election win with announcement of new panel of tax advisers as its looks to raise revenue if it gains power. SNB Vice Chairman Schlegel said FX interventions have contributed to price stability but will only use when necessary.
Among European sectors today, Banks (SX7P) the best performer (post the US inflation data). Also start of bank earnings season Friday. Utilities and Real Estate the notable sector underperformers, also reacting to latest rate dynamics post the US inflation data. Among stocks that moved higher on earnings/updates were Tesco (TSCO.LN), IQE (IQE.LN) and Barry Callebaut (BARN.SW). Meanwhile, Aixtron (AIXA.GR) was among notable decliners after being double downgraded at BNP Paribas Exane.
Digest:
Sectors - STOXX Europe 600:
Outperformers:
Banks +0.93%, Personal Care Drug and Grocery Stores +0.66%, Energy+0.57%, Travel & Leisure +0.51%, Technology +0.47%, Insurance +0.28%, Chemicals +0.24%, Ind Goods & Svcs +0.16%,
Underperformers:
Real Estate (1.55%), Utilities (1.30%), Basic Resources (0.75%), Construct & Mtls (0.41%), Financial Svcs (0.40%), Consumer Products and Services (0.22%), Autos & Parts (0.14%), Retail (0.11%), Media +0.02%, Food, Beverage and Tobacco +0.04%, Telecom +0.10%
Macro:
Rates, US inflation
Geopolitics
Switzerland to host Ukraine peace summit on June 15-16 - Reuters
France
France needs to cut €28B from budget to meet deficit target and avoid a credit rating downgrade - Reuters
UK
Ireland
Simon Harris officially elected as Taoiseach of Ireland - Irish Times
Italy
Govt eyes 7-yr adjustment agreement with EC - Giorgetti - ANSA
Company news:
Notable Gainers
+28.3% IQE.LN (IQE £0.27, +0.06) -- FY earnings and guidance
+13.7% TET.LN (Treatt £4.55, +0.56) -- trading update
+12.7% TNG.FP (Transgene €1.31, +0.15) -- to present new data will be presented on TG4050
+11.1% OBI.LN (Ondine Biomedical £0.08, +0.01) -- Steriwave authorized for use by HCA UK
+11.0% BARN.SW (Barry Callebaut CHF1,357.00, +135.00) -- H1 earnings
+9.4% XPP.LN (XP Power £10.78, +0.93) -- trading update
+8.9% CHH.LN (Churchill China £11.00, +0.90) -- FY earnings
+6.3% KOF.FP (Kaufman & Broad €29.50, +1.75) -- H1 earnings
+5.0% NDA.GR (Aurubis €73.65, +3.50) -- Metzler Capital Markets upgrade
+4.9% ADMCM.FH (Admicom €43.45, +2.00) -- Q1 earnings
+4.6% CANTA.SS (Cantargia SEK4.59, +0.20) -- publishes preclinical data on the potential of CAN10
+4.5% DR0.GR (Deutsche Rohstoff €0.00, +1.70) -- ups guidance
+4.4% DUST.SS (Dustin Group SEK12.87, +0.55) -- Q2 earnings
+3.3% TSCO.LN (Tesco plc £0.00, +0.10) -- FY earnings, announces further £1.0B buyback and guides FY24/25
+3.0% TROAX.SS (Troax Group SEK242.50, +7.00) -- initiated buy at Berenberg
+2.7% CEVI.SS (CellaVision SEK222.00, +6.00) -- Pareto upgrade
+2.6% SDY.LN (Speedy Hire £0.25, +0.01) -- trading update; updates on Velocity Strategy
+2.1% ELISA.FH (Elisa Oyj €43.02, +0.88) -- ABG Sundal Collier upgrade
+1.8% AMS.SM (Amadeus IT Group €57.52, +1.02) -- Alantra Equities upgrade
+1.7% NEXN.LN (Nexxen International £2.13, +0.04) -- amends terms of Revolving Credit Facility
+1.7% IPH.FP (Innate Pharma €2.30, +0.04) -- presents precinical data
+1.2% ATEA.NO (Atea NOK132.40, +1.60) -- Arctic Securities upgrade
+1.0% KWS.LN (Keywords Studios £11.90, +0.12) -- issues shares in connection with acquisition
+0.8% SALM.NO (Salmar NOK0.00, +5.50) -- reports prelim Q1 consolidated harvest volumes (1,000 tgw) 52.9
+0.7% DOM.SS (Dometic Group SEK87.90, +0.65) -- Handelsbanken upgrade
+0.7% NTGY.SM (Naturgy Energy Group €0.00, +0.14) -- Takeover and stake building rumours mentioned in Betaville
+0.5% AVCT.LN (Avacta Group £0.55, -0.00) -- trial data
+0.1% CTY1S.FH (Citycon €3.81, -0.00) -- Kepler Cheuvreux upgrade
+0.1% OUT1V.FH (Outokumpu €0.00, -0.00) -- CFO Pia Aaltonen-Forsell to leave the companyx
Notable Decliners
-16.0% NEL.NO (NEL ASA NOK5.23, -0.99) -- Pareto downgrade
-13.8% FUM.LN (Futura Medical £0.37, -0.06) -- FY earnings; initiated buy at Stifel
-8.3% DOCM.SW (DocMorris CHF85.20, -7.70) -- receives gematik approval for simple digital e-prescription redemption via health card
-6.3% MYCR.SS (Mycronic SEK347.40, -23.40) -- Handelsbanken downgrade
-5.8% MAHA.A.SS (Maha Energy SEK9.48, -0.56) -- MOU with 3R Petroleum and Enauta for possible transaction regarding 15% holdings in 3R Offshore
-5.6% INSTAL.SS (Instalco SEK38.90, -2.32) -- SEB downgrade
-4.9% ELIMP.NO (Elektroimport+â-+ren NOK9.40, -0.48) -- reinstated hold at DnB Markets
-4.7% AIXA.GR (Aixtron €22.19, -1.09) -- BNP Paribas Exane downgrade
-4.6% EDEN.FP (Edenred €46.48, -2.25) -- initiated sell at Jefferies
-4.0% ETX.LN (e-Therapeutics £0.12, -0.01) -- proposes fundraising of £28.90M before expenses by way of a subscription for 192.7M new ordinary shares
-3.5% GRF.SM (Grifols €9.19, -0.33) -- intention of refinancing its unsecured notes due 2025
-3.5% HUH1V.FH (Huhtamaki €36.48, -1.30) -- Berenberg downgrade
EU companies reporting tomorrow:
Earnings:
France: Carbios (ALCRB.FP)
DACHs: Helvetia (HELN.SW), Jungfraubahn (JFN.SW), Gerresheimer (GXI.GR), tonies (TNIE.GR), GESCO (GSC1.GR)
Nordics: Investment AB Oresund (ORES.SS)
The Kingfish Company (KING.NO)
Southern Europe: Admie Holdings (IPTO) (ADMIE.GA)
Trading Update: Givaudan (GIVN.SW), VAT Group (VACN.SW), Fagron (FAGR.BB), Publicis Groupe (PUB.FP), CATANA Group (CATG.FP)
Traffic: Flughafen Zurich (FHZN.SW)
CMD/events: Porsche (P911.GR) pre-close call
Data:
Economics:
Netherlands Feb Manufacturing Production +1.4% m/m vs consensus +2.8% and prior revised (4.4%) from (4.7%)
Denmark Mar CPI +0.9% y/y vs consensus +1.3% and prior +0.8%; 0.0% m/m vs consensus (0.3%) and prior +0.5%
Norway
Mar CPI +3.9% y/y vs consensus +4.2% and prior +4.5%
Mar PPI (6.9%) y/y vs consensus (4.6%) and prior (12.6%)
Sweden Feb Industrial Production (1.5%) y/y vs consensus +0.9% and prior +1.2%; (1.4%) m/m vs consensus (1.1%) and prior revised +2.6% from +2.3%
Italy Feb Retail Sales +2.4% y/y vs consensus +0.5% and prior 1.0%; +0.1% m/m vs consensus +0.2% and prior revised 0.0% from (0.1%)
Greece
Mar CPI +3.2% y/y vs consensus +3.3% and prior +2.9%
Feb Industrial Production +1.6% y/y vs consensus +4.1% and prior +10.3%
Markets:
WTI Crude (May 24): +$0.00 or +0.00% to $85.23
€-$ (0.0116) or (1.07%) to 1.0742
£-$ (0.0132) or (1.04%) to 1.2547
€-£ (0.0002) to 0.8564
S&P 500 (1.08%)
Performance year-to-date
FTSE 100: +2.95%
DAX: +8.03%
CAC: +6.66%
MIB: +12.15%
Stoxx 600: +5.76%
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