EUROPEAN EQUITY OPEN: Indices flattish; UK inflation rises to 40yr high but should ease ahead

INDICES: At 08:11BST, Euro Stoxx 50 0.00% at 3,741; FTSE 100 -0.05% at 7,514; DAX +0.01% at 14,187; CAC 40 +0.14% at 6,439; IBEX 35 +0.56% at 8,523; FTSE MIB +0.00% at 26,532; SMI +0.30% at 11,765 

OPEN: European shares open flat/slightly firmer. UK data for April today showed inflation rising to 14yr highs (to 9.0% Y/Y vs an expected 9.1%, prev. 7.0%), but analysts at Pantheon Macro said that headline CPI will likely ease over the coming months, probably to around 8.5% by August, as the anniversary of very large increases in prices, as businesses reopened after the lockdown, is reached; combined with the labour market data we got this week, PM said the absence of a wage price spiral "suggests that the MPC will be able to focus on the subdued medium-term outlook for CPI inflation and stop raising Bank Rate sooner than investors currently think." Later, we will get final Eurozone HICP data, which is expected to be confirmed at 7.5% Y/Y. Elsewhere in the G10, inflation data will also be due from Canada today where the headline is seen unchanged at 6.7% Y/Y, but the core rate is seen easing slightly to 5.4%. On the energy front, the DoE inventory data will be eyed after the API data saw crude stocks posting a surprise draw; there will be heavy attention on the gasoline stocks data; ING notes that the tightness in the middle distillate market appears to be spreading into the gasoline market in the US at a time when US gasoline inventories should be building ahead of the driving season, and with demand set to pick up in the months ahead, the market will continue to tighten, the bank warns. Expect geopolitical headlines to continue filtering through as G7 Finance Ministers meet today. The speakers slate for central bankers is thinner than recent days, leaving traders to perhaps continue digesting hawkish commentary made by the Fed chair on Tuesday. Supply-wise, the US will auction 20yr bonds, while Germany will sell a 2052 issue. Our 'Day Ahead' calendar can be accessed here.

NOTABLE MOVERS:

• Siemens Gamesa (SGRE SM) +8.0%: Siemens Energy (ENR GY) to purchase remaining stake in Siemens Gamesa and delist, BBG said.


• Air France-KLM (AF FP) +6.7%: CMA CGM reportedly to take 9% stake.


• Euronext (ENX FP) +6.0%: Results


• Burberry (BRBY LN) +2.5%: Results


• Commerzbank (CBK GY) +1.6%: Reportedly planning merger of German ops with UniCredit (UCG IM).


• ABN AMRO (ABN NA) -8.1%: Results

Our full European pre-market equity briefings for May 18th can be accessed here and here. Our 'Day Ahead' calendar can be accessed here.

18 May 2022 - 08:11- EnergyData- Source: Newsquawk