Jun 24 ,2024
Synopsis
European equity markets set to open flat to lower. Recall that last week saw an ongoing stabilization in European assets following the turmoil triggered by the surprise French snap poll announcement on 9-Jun after far-right gains at the EU election. Focus remains on the French political situation ahead of the two rounds of elections on 30-Jun and 7-Jul. Reuters reports France's far right National Rally (RN) party and its allies are seen leading the first round of the country's parliamentary elections with 35.5% of the vote, according to a poll published Sunday. The Ipsos survey - conducted for Le Parisien newspaper and Radio France on June 19-20 - showed the left-wing New Popular Front (NPF) alliance in second place with 29.5% of the vote. President Emmanuel Macron's centrist alliance was seen in third place, winning 19.5% of votes.
China and the EU have reportedly agreed to start discussions on the bloc's plans to impose tariffs on electric vehicles. Chinese Commerce Minister Wang Wentao and EU Trade Commissioner Valdis Dombrovskis spoke in a video conference Saturday. They agreed to begin talks. BBC notes the call marks the first time the two sides have agreed to negotiate since the EU threatened China with electric vehicle (EV) tariffs of up to 38%. The two sides would "continue to engage at all levels in the coming weeks". According to the Global Times, observers said the best outcome the Chinese side wants is that the EC scrap its tariff decision before July 4 .
In the UK, kicking-off the final week of tv debates/interviews ahead of general election on 4-Jul are, The Panorama Interviews series on BBC1 at 19:00BST, is with co-leader of the Green Party Adrian Ramsay, the same time as ITV has interviews with co-leader of the Green Party Carla Denyer, and Reform UK's Richard Tice, as well as STV has an interview with SNP Leader John Swinney. UK Business Secretary Badenoch head-to-head tv debate with her Labour counterpart Jonathan Reynolds at 12:30BST on Bloomberg
European macro data releases out today include Germany Jun Ifo survey, Finland May PPI, UK Jun industrial trends orders - CBI. Already on the tape: Netherlands Q1 GDP (0.7%) y/y v preliminary (0.7%)
In central banks, Czech central bank publication of the Financial Stability Report at 9:00CET, also releases minutes of the 6-Jun meeting on financial stability issues. Austria Central Bank's press conf. at 10:00CET by Dep. Governor Haber in connection with Financial Stability Report. Bundesbank's Nagel lecture at 12:10CET at event organised by Villa Vigoni, German-Italian Centre for the European Dialogue. ACPR Conf "Ten years of SSM banking supervision: key achievements and main challenges ahead", speakers include Bank of France's Villeroy at 14:30CET, ECB's Fernandez-Bollo chairs roundtable at 15:00, includes ECB Buch, with ECB's McCaul panellist at 16:15. Conf. on macroprudential policies to mitigate housing market risks, participants include Lithuania Central Bank's Varanauskiene. Slovakia Central Bank publishes latest macroprudential commentary. Chancellor Scholz speech at 13:00CET at BDI conf (thru Tue, livestream registration), other speakers include economy minister Habeck 14:30, ECB's Schnabel panellist at 17:30.
Elsewhere, there is ministerial meeting of the European Free Trade Association. Norway's defence minister Gram makes bilateral visit to Denmark and climate and environment minister Eriksen meets US climate envoy John Podesta. The Emir of Qatar pays an official visit to the Netherlands. EU's Agriculture and Fisheries Council will seek to approve a set of conclusions on the future of agriculture in the EU and EU's Foreign Affairs Council meets. EU's Vestager speech at 9:30CET at Dutch competition regulator's conf. on the ECN DMA enforcement. EU's Jourová speech at the conf. 'Czech priorities in the EU' organized by Euractiv. EU's Simson speech at European Nuclear Safety Conf. (thru Tue).
Also today, European Court of Auditors due to publish report on the security of gas supplies in the EU. Switzerland KOF releases latest consensus forecasts
Politics/Macro/World News
China, European Union Agree to Hold Talks on EV Tariffs - Bloomberg
China and EU to hold talks on electric car tariffs - BBC
Schnabel Says Potential Shocks Mean ECB Can't Precommit on Rates - Bloomberg
Conservatives have lost a third of their voters since January, poll finds - FT
Labour's budget hopes rest on overly optimistic UK forecasts, say economists - FT
France's far right National Rally (RN) party and its allies are seen leading the first round of the country's parliamentary elections with 35.5% of the vote - Le Parisien
Top company news
Earnings/updates
PRU.LN (Prudential) -- announces launch of $2B buyback
ALK.B.DC (ALK-Abello) -- provides updated outlook; expects EBIT margin 18-20% vs prior guidance 17-19%
COP.GR (CompuGroup Medical) -- expects to grow more strongly in H2 this year than in H1 - Börsen-Zeitung
M&A
CO.FP (Casino Guichard-Perrachon) -- Casino Group announces agreement with Rocca and Auchan Retail France for the sale of Codim 2
CCR.LN (C&C Group) -- Activist Engine Capital amasses stake in C&C Group of just under 5%; pushes company to initiate strategic review aimed at a sale - Bloomberg
ORA.FP (Orange) -- exploring sale of 40% stake in Mauritius Telecom - Bloomberg (21-Jun, 16:54 CET)
AAL.LN (Anglo American) -- preparing to launch sale process for portfolio of Australian coalmining assets - The Australian
HOLN.SW (Holcim) -- acquires Cand-Landi Group in Switzerland; price not disclosed
NHY.NO (Norsk Hydro) -- Hydro completes transaction for sale of 49.9% of Hydro Rein to Macquarie Asset Management
LDO.IM (Leonardo) -- Seri submitted only compliant offer for Leonardo's stake in Industria Italiana Autobus
HL.LN (Hargreaves Lansdown) -- Holders split on offer for Hargreaves Lansdown - Sunday Times
BVIC.LN (Britvic) -- Carlsberg expected to offer up to 1,400p/share for Britvic - London Times
BVIC.LN (Britvic) -- Pepsi gives nod to Carlsberg's takeover of Britvic - Sunday Times
NORSE.NO (Norse Atlantic) -- Discussion on strategic investment option in Norse Atlantic ends without agreement; details not provided
OpenAI paid a few hundred million dollars in shares for Rockset - Reuters, citing sources familiar with the matter
HPS Investment Partners thinking about IPO or merger - FT
Healthcare
VLA.FP (Valneva) -- announced that Health Canada has approved IXCHIQ for the prevention of disease caused by the chikungunya virus in individuals 18 years of age and older.
ALK.B.DC (ALK-Abello) -- ALK provides update on regulatory process for the house dust mite allergy tablet in China
Other
UCG.IM (UniCredit) -- announces launch of third tranche of buy-back program
ACX.SM (Acerinox) -- resumes activity in Spain
FRAS.LN (Frasers Group) -- Frasers near deal to offer its buy-now-pay-later service through different retailer - Sunday Times
SWON.SW (SoftwareONE Holding) -- appoints Raphael Erb as new Chief Revenue Officer effective 1-Jul; succeeds Rohit Nagarajan
Estimated weekend box office revenues in US, Canada $151.1M, +38.5% y/y - Box Office Mojo
Key rating changes
Upgrades
ABI.BB (Anheuser-Busch InBev) -- to buy from neutral at UBS
HOT.GR (Hochtief) -- to buy from hold at Jefferies
NKT.DC (NKT A/S) -- to buy from hold at Carnegie Securities
BC.IM Brunello Cucinelli upgraded to hold from reduce at Kepler Cheuvreux
ALLFG.NA Allfunds Group upgraded to outperform from neutral at Autonomous Research
Downgrades
FLTR.LN (Flutter Entertainment) -- to hold from buy at Peel Hunt
ZAL.GR (Zalando) -- Zalando assumed equal-weight at Morgan Stanley; prior rating was overweight
AFX.GR (Carl Zeiss Meditec) -- to neutral from buy at UBS
S92.GR (SMA Solar Technology) -- to neutral from outperform at BNP Paribas Exane
YOU.LN (YouGov) -- to hold from buy at Liberum Capital
Initiations
EKTA.B.SS (Elekta) -- hold at Deutsche Bank
Data
Nikkei +0.74% to 38882.16
Hang Seng (0.74%) to 17894.22
Shanghai Composite (0.64%) to 2978.90
S&P futures (0.5) vs prior close of 5534.3
€-$ +0.0005 or +0.05% to 1.0698
$-¥ (0.06) or (0.04%) to 159.72
€-¥ +0.05 or +0.03% to 170.88
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