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StreetAccount Summary - EU Market Recap: FTSE 100 (0.70%) to 8259.29, DAX (0.52%) to 18677.87, CAC40 (0.92%) to 8057.80, STOXX 600 (0.60%) to 519.08

May 28 ,2024

  • Synopsis:

    • European equity markets finished lower, just off worst levels. Travel, media, food/beverage and retail the main laggards, while real estate, oil/gas, auto and banks outperform. Dollar index down 0.1%. Gold up 0.9%. Bitcoin futures down 1.9%. WTI crude up 2.2%. US equities mostly higher in Tuesday midday trading.

    • Quiet macro calendar in Europe. ECB consumer inflation expectations ease, bolstering case for rate cut. German wholesale prices firmer than expected. BRC update said UK shop inflation back at normal levels. CBI survey shows retail sales bounce in May to best level since Dec-22.

    • In monetary policy, Bank of France chief Villeroy latest to warn against overly restrictive ECB policy in an interview in Boersen Zeitung and said rate cut next week as good as certain. On the issue of whether the ECB will follow up with a July cut, said it should maintain flexibility in terms of timing and pace. Markets pricing in two to three cuts of 25 bps by year-end. Villeroy highlighted that with a deposit rate of 4% it has significant room for rate cuts. In the UK, BoE Deputy Governor Broadbent, who is due to leave next month after 13 years, has rejected claims of policy groupthink, London Times reports. Broadbent said there is a robust discussion on every question at every meeting and dismissed criticism. Ahead of its 20-Jun meeting, Broadbent said it was making progress on bringing inflation down. However, he pointed out that although easing was likely to be necessary in coming months, it doesn't mean it has to cut rates right now. Note, market pricing in first BoE rate cut at August the earliest, but less than 50% chance seen. Market fully priced for November and just one rate cut seen this year. However, BoE has also hinted it can cut rates while keeping policy restrictive.

    • Latest UK election headlines sees Conservatives pledge not to levy tax on state pensions. Labour Party wins backing of 120 business leaders after decade of economic stagnation. EU foreign ministers dismissed Putin's indirect offer to start negotiations on a ceasefire in Ukraine as not serious.

    • Limited corporate news of note. Quadient (QDT.FP) issued Q1 revenue and confirmed its FY24 guidance. ADLER Group (ADJ.GR) reported Q1 sales, Intermediate Capital Group (ICG.LN) posted better-than-expected FY numbers. Elsewhere, doValue (DOV.IM) nearing agreement with lenders for ~€450M in credit facilities; Intesa Sanpaolo (ISP.IM) to launch previously announced €1.7B share buyback program. Flutter Entertainment (FLR.LN) shares lower after Illinois Senate passes bill increasing tax rates on sportsbooks.

    • In M&A newsflow, according to Sky News, Persimmon (PSN.LN) is looking at submitting £1B bid for Cala Group; may submit a bid before next week's deadline. Eurazeo (RF.FP) to sell its 30% stake in Lumapps for €210M to Bridgepoint (BPT.LN). Newlat Food (NWL.IM) intends to acquire Princes from Mitsubishi Corporation (8058.JP) in agreement valued at £700M (€823.2M/¥140.29B). Revolution Bars Group (RBG.LN) updates regarding the approach from NightCap; board has concluded that the Nightcap proposal is incapable of being delivered, which was communicated to Nightcap last week.

  • Digest:

    • Sectors - STOXX Europe 600:

      • Outperformers:

        • Real Estate +0.65%, Banks +0.30%, Autos & Parts +0.14%, Oil & Gas+0.11%, Telecom (0.02%), Technology (0.10%), Basic Resources (0.29%)

      • Underperformers:

        • Travel & Leisure (2.76%), Media (1.44%), Food, Beverage and Tobacco (1.10%), Construct & Mtls (1.04%), Health Care (1.03%), Consumer Products and Services (0.97%), Personal Care Drug and Grocery Stores (0.96%), Financial Svcs (0.88%), Retail (0.76%), Ind Goods & Svcs (0.76%), Chemicals (0.73%), Insurance (0.68%)

    • Macro:

      • ECB:

        • ECB's Schnabel says asset purchases must be used carefully outside of crisis: speech

        • Villeroy says ECB has significant room for rate cuts: Reuters

      • BoE:

        • BoE deputy chief Broadbent rejects claims of groupthink and hints at rate cut delay: London Times

      • UK

        • Labour Party wins backing of 120 business leaders: The Times

        • UK Labour will push ahead with British ISA plan but Natwest sale under review: CityAM

        • Survey shows fastest rate of UK retail sales growth since Dec-22: CBI Distributive Trade Survey

      • Germany:

        • Germany should consider easing debt brake, says IMF: Reuters

      • Geopolitics:

        • Western business backtrack on Russia exit plans: FT

        • Macron calls for buy European strategy and increased EU investment to bolster sovereignty: Bloomberg

        • Spain, Ireland and Norway recognise Palestinian statehood: Reuters; Danish parliament rejects proposal to recognise Palestinian state: Reuters

    • Peripheral markets:

      • Italy:

        • April 2024 Italian Banking Association (ABI) data showed resilience amid fragility, with lending down 2.1% y/y but improving from end-2023; deposit outflows moderated while bond investments surged

      • Romania:

        • Ruling coalition ahead in European election poll: Reuters

      • Greece:

        • Greek-operated vessel hit by missiles off Yemen's coast, say shipping sources: Kathimerini

    • Company news:

      • Notable Gainers

        • +78.3% CALTX.SS (Calliditas Therapeutics SEK202.60, +89.00) -- Asahi Kasei to acquire company for SEK11.8B

        • +12.4% PCELL.SS (PowerCell Sweden SEK39.68, +4.36) -- order

        • +9.0% DOV.IM (doValue €2.07, +0.17) -- nearing agreement with lenders for ~€450M in credit facilities - Bloomberg

        • +6.9% MPCC.NO (MPC Container Ships NOK21.55, +1.40) -- Q1 earnings

        • +5.8% QLINEA.SS (Q-linea SEK2.57, +0.14) -- Podler technology valued at SEK 70M

        • +5.4% JD.LN (JD Sports Fashion £1.28, +0.07) -- to publish FY results on 31-May; expects results to be in line with guidance

        • +4.3% MDG1.GR (Medigene €1.22, +0.05) -- filing of three patents with European Patent Office

        • +4.1% KOA.NO (Kongsberg Automotive NOK1.71, +0.07) -- CFO to steps down

        • +3.2% ICG.LN (Intermediate Capital Group £23.94, +0.74) -- FY earnings

        • +2.7% RENX.LN (Renalytix £0.19, +0.01) -- CFO steps down

        • +2.6% ETTE.FH (Etteplan €13.90, +0.35) -- acquisition

        • +2.2% PAAL.B.DC (Per Aarsleff Holding DKK386.50, +8.50) -- Q2 earnings; launches share buyback programme

        • +1.8% BNN.GR (BRAIN Biotech €2.82, +0.05) -- H1 earnings

        • +1.1% MATAS.DC (Matas DKK125.00, +1.40) -- FY earnings

    • Notable Decliners

      • -7.3% FLTR.LN (Flutter Entertainment £148.15, -11.75) -- Illinois Senate on Sunday passed 2025 budget that included sports-betting tax hike;

      • -6.8% ADJ.GR (ADLER Group €0.20, -0.01) -- Q1 revenue

      • -4.1% DESN1.SW (Dottikon ES Holding CHF256.00, -11.00) -- FY earnings

      • -3.0% PSN.LN (Persimmon £14.37, -0.45) -- looking to place £1B bid for Cala group; analysts suggest an all-share deal would require company to issue 68m shares for a £1B EV

      • -2.9% EFGN.SW (EFG International CHF12.00, -0.36) -- 4M trading update

      • -2.7% KAP.LN (National Atomic Company Kazatomprom £44.25, -1.25) -- Q1 earnings

      • -2.6% SVT.LN (Severn Trent £23.85, -0.64) -- press reports suggest UK regulator Ofwat poised to refuse most suppliers' requests for big price rises to consumer bills, with some getting as little as half of what they have asked for

      • -2.5% SLR.SM (Solaria Energia €11.50, -0.30) -- Q1 earnings

      • -1.7% KDEV.SS (Karolinska Development SEK1.53, -0.03) -- invests in BOOST Pharma

      • -1.2% CHAR.LN (Chariot £0.09, -0.00) -- updates on gas discovery at OBA-1 Well on Dartois prospect

  • EU companies reporting tomorrow:

    • Earnings:

      • DACHs: Vienna Insurance Group (VIG.AV), EVN (EVN.AV), Aroundtown (AT1.GR), GK Software (GKS.GR), Novem Group (NVM.GR), The Platform Group (TPG.GR), Manz (M5Z.GR)

      • France: Pierre & Vacances (VAC.FP)

      • Nordics: MPC Container Ships (MPCC.NO), BerGenBio (BGBIO.NO)

      • Southern Europe: Telecom Italia (TIT.IM), Greek Organisation of Football Prognostics (OPAP.GA)

      • UK: Pets At Home Group (PETS.LN), Impax Asset Management Group (IPX.LN), Pershing Square Holdings (PSH.LN), Bank of Georgia Group (BGEO.LN)

    • Trading Update: STRABAG (STR.AV)

Data:

  • Economics:

    • Sweden Apr Trade Balance SEK7.9B vs consensus SEK4.0B and prior revised SEK 5.30B from SEK4.8B

    • Norway April Retail Sales (0.3%) m/m and prior +0.3%

    • Denmark April Retail Sales +0.2% y/y vs prior revised to +3.2% from +3.7%

    • Ireland Apr Retail Sales (0.9%) y/y vs prior revised +2.0% from +1.0%; (1.2%) m/m vs prior revised +2.1% from +1.7%

  • Markets:

    • WTI Crude (Jul 24): +$1.90 or +2.44% to $79.62

    • €-$ +0.0019 or +0.17% to 1.0879

    • £-$ +0.0011 or +0.09% to 1.2780

    • €-£ +0.0007 to 0.8512

    • S&P 500 +0.07%

    • Performance year-to-date

      • FTSE 100: +6.80%

      • DAX: +11.50%

      • CAC: +6.82%

      • MIB: +14.19%

      • Stoxx 600: +8.37%

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