Back to Daily DR Market Summary

StreetAccount Summary - EU Market Recap: FTSE 100 (0.41%) to 8251.39, DAX (0.52%) to 18555.39, CAC40 (0.45%) to 8004.01, STOXX 600 (0.19%) to 523.69

Jun 07 ,2024

  • Synopsis:

    • European indices ended mostly lower, with the Nordics outperforming the region. After yesterday's hawkish ECB cut, source report highlighted hawkish officials regretted premature rate cut commitment after run of stronger data. ECB hawks Kazaks, Muller and Nagel this morning all reiterated the cautious, data-dependent stance issued by President Lagarde during yesterday's policy decision. ECB issued the well-telegraphed hawkish 25bps cut, indicating inflation will take longer to reach 2% target. President Lagarde noted significant improvement in inflation outlook and suggested a potential shift to a "dialing-back phase," though she did not confirm this change. Focus also on Fed policy with US NFP data: May nonfarm payrolls grew by 272K vs consensus 180K and April's downwardly revised 165K (was 175K). Unemployment rate ticked higher to 4.0%, above consensus for 3.9%. Average hourly earnings were up 0.4% m/m vs consensus for a rise of 0.3% and last month's 0.2%

    • On the macro-front, German Industrial production disappointingly dropped 0.1% m/m in April, following a 0.4% decline in Marc. Sluggish performance, driven by weaknesses in intermediate goods and construction, contrasts with 1.6% monthly rise in exports. The trade surplus remained solid at €22.1B. Looking ahead, analysts suggest strong wage growth should fuel a cautious rebound in private consumption, while the inventory cycle is expected to gradually become more positive for industrial activity. Also, UK Halifax house price data slightly weaker-than-expected and final Eurozone Q1 GDP figures also out

    • In politics, EU Parliament elections on 6-9 June are poised to see gains for right-wing populist parties, though likely not seismic shifts in the overall balance of power. Polls suggest groups like France's Rassemblement National, Italy's Fratelli d'Italia, and Germany's AfD could make significant advances. However, analysts suggest proportional voting system and country distribution make major upsets improbable. While mainstream pro-EU centrist and center-left blocs may see their majority eroded, they should still retain ~60-63% of seats. Analysts suggest key question is whether incumbent Commission President von der Leyen will be re-appointed. As European People's Party's lead candidate, she remains frontrunner if they avoid major losses. Forging pro-EU governing coalition between three or more groups to confirm her could prove complicated. Beyond Brussels leadership intrigue, elections seen as bellwether for national sentiments. Stronger-than-expected showings for populist forces could foreshadow shifts in upcoming national votes like the 2024 German federal election. Finally, upcoming elections vital for charting Europe's strategic direction, as research remains defined by industrial networks rather than pioneering new frontiers, reflecting fragmented capital markets and policies favoring incumbents over new entrants. Analysts flag clear economic priorities, rather than pursuing foreign policy overreaches

    • On a light corporate news flow front, at its CMD, Rexel (RXL.FP) upgraded its medium-term financial targets, now expecting adj EBITA margin above 7%, whilst Temenos (TEMN.SW) will commence its CHF200M buyback; in the UK, Bellway (BWY.LN) issued a trading update and C&C Group (CCR.LN) posted its delayed FY earnings, CEO Patrick McMahon stepped downand also updated on accounting adjustments. In M&A news, VINCI SA (DG.FP) acquired a a 20% shareholding in the Budapest airport concession company, whilst WIIT confirmed that it does not intend to make an offer for Redcentric (RCN.LN)

    • Looking ahead to next week's calendars (pls see our StreetAccount Summary - Europe Week Ahead: June 10-14 attached below), the result of EU Parliament elections, G7 Summit, IEA / OPEC monthly oil market reports, UK Apr unemployment rate and earnings & updates from Colruyt Group (COLR.BB), Halma (HLMA.LN) and Tesco (TSCO.LN) will be main events. Other companies due to report include, Bellway (BWY.LN), FirstGroup (FGP.LN), Oxford Instruments (OXIG.LN), Safestore Holdings (SAFE.LN), Virgin Money UK (VMUK.LN), Wise (WISE.LN) and DFDS (DFDS.DC). Airlines/airports due to release latest traffic data include Flughafen Zurich (FHZN.SW), Fraport (FRA.GR), Flughafen Wien (FLU.AV). Away from the region, there are interest rate decisions in USA (Wed after EU markets close) and Japan (Fri before EU market opens)

  • Digest:

    • Sectors - STOXX Europe 600:

      • Outperformers: Health Care +0.48%, Technology +0.44%, Chemicals +0.25%, Banks +0.15%, Persnl & HHold Goods +0.09%, Oil & Gas (0.11%), Media (0.15%)

      • Underperformers: Real Estate(2.95%), Utilities (1.01%), Basic Resources (0.97%), Telecom (0.80%), Autos & Parts (0.79%), Construct & Mtls (0.71%), Retail (0.70%), Travel & Leisure (0.62%), Ind Goods & Svcs (0.51%), Insurance (0.49%), Financial Svcs (0.48%), Food & Beverage (0.47%)

    • Macro:

      • Lagarde faces tough time 'in charge' of ECB's message (Reuters)

      • Germany's New Pro-Russia Party Piles Pressure Onto Olaf Scholz (BBG)

      • Manfred Weber has already won the European Parliament election. Can he handle what comes next? (Politico)

      • Germany is thinking about bringing back conscription (Economist)

      • Rishi Sunak apologises for leaving D-Day commemorations early (FT)

      • Not with Macron on Ukraine, no to escalation says Italy's Tajani (Ansa)

      • Dutch left-wing holds off surging Wilders in tight EU election, exit poll shows (Reuters)

    • Company news:

      • Notable Gainers

        • +3.7% DOV.IM (doValue €2.28, +0.08) -- agrees to acquire Gardant

        • +3.5% NEL.NO (NEL ASA NOK7.48, +0.25) -- Cavendish Hydrogen to hold a live webcast with a company presentation

        • +3.3% TEMN.SW (Temenos CHF60.35, +1.95) -- to commence up to CHF200M buyback

        • +1.2% ALMKT.FP (Mauna Kea Technologies €0.43, +0.01) -- JV in China

        • +0.8% VK.FP (Vallourec €16.07, +0.13) -- contract

      • Notable Decliners

        • -7.3% CCR.LN (C&C Group £1.57, -0.12) -- FY earnings; CEO Patrick McMahon to step down; updates on PY accounting adjustments

        • -6.7% RCN.LN (Redcentric £1.36, -0.10) -- WIIT confirms that it does not intend to make an offer

        • -4.0% RF.FP (Eurazeo €75.85, -3.20) -- Grape Hospitality signs exclusivity agreement for sale of 23 hotels

        • -2.5% DG.FP (VINCI SA €110.90, -2.80) -- acquisition

        • -2.2% FPH.GR (Francotyp-Postalia Holding €2.70, -0.06) -- reports Q1

        • -0.5% ADKO.AV (Addiko Bank €20.10, -0.10) -- NLB publishes voluntary public takeover offer

        • -0.3% BWY.LN (Bellway £27.74, -0.08) -- trading update

        • -0.1% RXL.FP (Rexel €27.06, -0.02) -- new M/T targets -- CMD

    • EU companies reporting on Monday:

      • Traffic: SAS (SAS.SS)

      • CMD/events: Sulzer (SUN.SW)

  • Data:

    • Economics:

      • Germany Apr

        • Industrial production (0.1%) m/m vs consensus +0.1%, prior (0.4%)

        • Trade balance €22.1B vs consensus €22.6B, prior revised €22.2B from €22.3B

      • UK May house price index +1.5% y/y vs consensus +1.2%, prior +1.1%; (0.1%) m/m vs consensus +0.2%, prior +0.1% - Halifax

      • France Apr trade balance (€7.6B) vs consensus (€5.4B), prior revised (5.4B) from (€5.5B)

      • Eurozone Q1 GDP +0.4% y/y vs 2nd estimate +0.4%; +0.3% q/q vs 2nd estimate +0.3%

      • Denmark Apr manufacturing production +11.3% m/m vs consensus +3.5%, prior revised (4.2%) from (5.2%)

      • Norway Apr manufacturing production (5.6%) m/m vs consensus (4.7%), prior revised +5.6% from +5.4%

      • Greece Q1 preliminary GDP +2.1% y/y vs consensus +1.6%, prior revised +1.3% from +1.2%

      • Ireland May Unemployment Rate 4.0% vs consensus 4.5% and prior revised 4.0% from 4.4%

    • Markets:

      • WTI Crude (Jul 24): +$0.28 or +0.37% to $75.83

      • €-$ (0.0080) or (0.73%) to 1.0811

      • £-$ (0.0065) or (0.51%) to 1.2726

      • €-£ (0.0019) to 0.8493

      • S&P 500 +0.13%

      • Performance year-to-date

        • FTSE 100: +6.70%

        • DAX: +10.77%

        • CAC: +6.11%

        • MIB: +14.27%

        • Stoxx 600: +9.33%

This information and data is provided for general informational purposes only. The Bank of New York Mellon and our information suppliers do not warrant or guarantee the accuracy, timeliness or completeness of this information or data. We provide no advice nor recommendation or endorsement with respect to any company or securities. We do not undertake any obligation to update or amend this information or data. Nothing herein shall be deemed to constitute an offer to sell or a solicitation of an offer to buy securities.
Please refer to "Terms Of Use".

DEPOSITARY RECEIPTS:
NOT FDIC, STATE OR FEDERAL AGENCY INSURED
MAY LOSE VALUE
NO BANK, STATE OR FEDERAL AGENCY GUARANTEE