EUROPEAN EQUITIES UPDATE: European indices lower whilst US futures gain ahead of US NFP

STOXX 600: -0.6%

• European bourses began the session entirely in the red, and continued to trundle lower in early morning trade; more recently, a slight bounce has been seen, as sentiment improves a touch ahead of the widely anticipated NFP report.


• In the prior session, US President Trump signed amendments to Canadian and Mexican tariffs, making USMCA-compliant products exempt from levies until 2nd April; however, this failed to lift sentiment.


• On the ECB, Bloomberg sources suggest that ECB officials see an April showdown on whether to cut rates again. There has also been some mixed reporting via Reuters; some see a growing chance that rates will fall further, with 2.5% unlikely to be the bottom; whilst others see a growing chance of a pause at the next meeting.


• Docket today included German Industrial Orders which printed below the most pessimistic of analyst expectations.

Sectors: Negative

• European sectors hold a strong negative bias.


• Telecoms is leading today, albeit modestly so; newsflow for the industry has been light aside from EU Defence Commissioner Kubilius saying it is possible to replace Starlink in Ukraine quickly.


• Consumer Products is the clear underperformer today, with particular weakness in the Luxury sector for a couple of reasons; firstly, Chinese exports/imports data were weaker than expected, further economic activity woes in the region. Secondly, Ferragamo (-14%) slips after it reported weak sales and provided cautious outlook for 2025; Asia sales underperformed.

Others: DAX 40 -1.3%, FTSE 100 -0.3%

• The DAX 40 is the clear underperformer today, giving back some of this week’s upside, which was sparked by Germany’s recent spending plans; losses today are broad based. Sentiment in the region has been after following dire German Industrials Orders. In terms of stock specifics; BMW (-3.2%) sits towards the foot of the pile after highlighting that vehicles made in Mexico and US do not comply with USMCA rules, meaning they will be subject to 25% tariff. Elsewhere, MTU Aero (-1.5%) after being downgraded at Kepler.


• The FTSE 100 is a little lower and faring a touch better vs peers; Fresnillo (+2%) tops the pile after receiving an upgrade at Berenberg. British American Tobacco (+0.5%) edged higher on reports that it will settle its Canadian tobacco litigation, and will not impact 2025 guidance.

US Equity Futures: ES +0.4%, NQ +0.6%, RTY +0.3%

• US equity futures are firmer; the lift in sentiment today could be attributed to the strong Broadcom results; Co. shares are up 18% in pre-market trade after reporting strong AI-demand in Q1, where profits and sales topped expectations.


• The highlight of the day is the US jobs report for February, where the pace of payroll additions is seen at 160k (vs 143k in January), the jobless rate is seen unchanged at 4.0%, while average earnings are seen unchanged at 41% Y/Y. (Check the Newsquawk Research Suite for a full NFP Preview).


• Remarks are expected today from the Fed Chair Powell, who will discuss the outlook, Fed's Williams and Governor Bowman (both voters), will speak at a conference discussing policy transmission post-COVID and Fed's Kugler (voter) will speak on rebalancing labour markets and monetary policy. Elsewhere, of note for crypto currency traders, following President Trump's signing of an executive order to create a Strategic Bitcoin Reserve and a US Digital Asset Stockpile, the White House will host its first-ever crypto summit today.

07 Mar 2025 - 10:15- EquitiesEU Research- Source: Newsquawk