EUROPEAN EQUITIES UPDATE: European bourses treading water into ECB and US CPI

STOXX 600: +0.4%

• European bourses are modestly firmer across the board, with some outperformance in the CAC 40 (+0.7%).


• In terms of key newsflow; US President Trump's administration appealed the court ruling blocking the removal of Fed Governor Cook. Elsewhere, US Senate Republicans are aiming to confirm President Trump’s temporary Federal Reserve pick Stephen Miran as soon as Monday, according to Politico, citing two sources.


• Attention today now turns to the ECB, where rates are expected to remain unchanged; the deposit rate is expected to be left at 2.00%. More focus will be on the guidance provided rather than the decision itself, where attention will be on details regarding further easing and the split of views on the Governing Council. Markets remain uncertain on future cuts, with around a 50% chance of a reduction by February next year. Updates to the current ECB projections will also be in focus; the 2026 inflation forecast is currently at 1.6%. Analysts do not anticipate further cuts this cycle, and updated projections should ease concerns of inflation falling below 2%. ECB's Lagarde will speak thereafter.

Sectors: Positive

• European sectors hold a strong positive bias, albeit with the breadth of the market fairly narrow. There are only a handful of industries holding marginally in the red.


• Retail is once again leading the pile, continuing the strength seen in the prior session. Energy follows closely behind, and Construction & Materials completes the top three.


• Tech gives back some of the prior day’s strength and bottoms the pile, albeit with very modest losses. Autos and Basic Resources are also a little lower today – the latter seemingly thanks to losses in underlying metals prices.


• Citi European Equity Strategy - Upgrades: Retail to Overweight from Neutral; Financial Services to Neutral from Underweight; Telecoms to Neutral from Underweight. Downgrades: Media to Neutral from Overweight.

Others:

• Covestro +6%; ADNOC is close to finalising remedies to address EU concerns on its subsidy probe, via Reuters, citing sources.


• Kering +1.7%; Kering delays full Valentino acquisition to 2028, due to debt concerns.


• Sika +0.5%; upgraded to Neutral from Underweight at JPMorgan


• Playtech +7%; Says H2 has started well. Plans to increase investment for growth in the US and Brazil in H2'2025.

US Equity Futures: ES +0.1%, NQ +0.2%, RTY -0.2%

• Futures are mixed with the ES/NQ posting modest gains, whilst the RTY is slightly on the back foot. Price action so far has been non-committal, heading into the US CPI report


• Delving into the CPI report, consensus expects US headline CPI to rise by +0.3% M/M in August (prev. +0.2%), with the headline annual rate seen rising to 2.9% Y/Y from 2.7%. The core rate is also seen rising by +0.3% M/M (prev. +0.3%), with the annual rate of core CPI seen unchanged at 3.1%. ING opines that following the softer-than-expected PPI figures on Wednesday, “the chances of today’s US core CPI exceeding the consensus 0.3% MoM are lower”.


• On Wednesday, Barclays raised its 2025 and 2026 SPX PTs to 6450 and 7000, respectively. The analysts cited strong corporate earnings and AI growth to offset the ongoing labour market woes.

11 Sep 2025 - 09:55- ForexData- Source: Newsquawk