EUROPEAN EQUITY OPEN: Indices open in the red as traders return from long weekend; Ukraine, monpol in focus

INDICES: At 08:15BST,  Euro Stoxx 50 -0.95% at 3,812; FTSE 100 -0.37% at 7,588; DAX -0.96% at 14,028; CAC 40 -1.12% at 6,515; IBEX 35 -0.70% at 8,638; FTSE MIB +0.00% at 27,123; SMI -1.29% at 12,314.  

OPEN: European equity indices open with a downside bias following the long weekend, with focus once again falling onto the Russia-Ukraine conflict, which the latter had said is moving into the “second phase” as Russia begins a large-scale offensive in Donbass. US Treasury Secretary Yellen will skip some sessions at the G20 finance ministers' meetings this week as a protest against the war, and is to urge other institutions like the IMF and World Bank to increase pressure on Moscow. Elsewhere, monetary policy divergence is once again in play after hawkish commentary from Fed's 2022 voter Bullard late Monday, where he raised the possibility of a 75bps rate hike to manage inflation, but said that was not his base case. In other central banking news, the PBoC's weekend monetary policy moves have underwhelmed; the central bank cut its reserve requirement ratio, which analysts said will help lower bank lending rates; "but in order to make much difference to credit growth it needs to be followed up by cuts to policy rates and a relaxation of loan quotas," Capital Economics said; accordingly, there will be attention on the PBoC’s LPR setting meeting which takes place overnight. The data docket is thin for the day; the IMF World Outlook will be released (likely to show growth challenges in the near-term combined with higher inflation), and after the US close, weekly energy inventory data from the API. Our full 'Day Ahead' calendar can be accessed here. The US corporate earnings slate features JNJ, LMT, PLD, NFLX, and IBM (our full daily calendar of earnings expectations can be accessed here); Europe’s L’Oreal (OR FP) reports after the close.

STOCK SPECIFICS: In deal news, An agreement between Blackstone and Edizone on Atlantia (ATL IM) would last five years, and the two parties are committed to maintaining investment grade for the company, Il Sole reported; Next (NXT LN) acquired 44% of JoJo Maman Bebe; ousted founder announced support for PE firm Sycamore in the formal sale process of Ted Baker (TED LN); SocGen (GLE FP) and Credit du Nord have announced new branding of retail banks in 2023. In board room news, FTSE 100 CEO pay bounces back to pre-pandemic levels, according to the FT; NatWest (NWG LN) is facing an investor rebellion over execs' pay, The Times reported. In autos, BMW (BMW GY) CEO pledges it will not cut jobs in transition from ICE to EV; Volkswagen's (VOW3 GY) plants in Changchun, China slowly resuming production, but is still assessing feasibility of reopening Shanghai plant. In other industrials, Rolls-Royce (RR/ LN) backs Aeralis, the UK-designed fighter jet that could replace the RAF's ageing fleet of Hawk trainers, Telegraph reports; ADP (ADP FP) March traffic figures have doubled Y/Y. In health care, FDA accepts GlaxoSmithKline (GSK LN) new drug application for daprodustat; AstraZeneca's (AZN LN) enhertu has been granted Priority Review in the US for patients with previously treated HER2-mutant metastatic non-small cell lung cancer. In corporate updates, Pearson (PSON LN) reiterates guidance. In broker moves, Atlantia (ATL IM) downgraded at Santander, Carrefour (CA FP) upgraded at Berenberg, CRH (CRH LN) upgraded at Barclays, Elior (ELIOR FP) downgraded at Deutsche Bank, ITV (ITV LN) downgraded at Berenberg, Prudential (PRU LN) upgraded at SocGen, Randstad (RAND NA) upgraded at Exane BNP, SSP Group (SSPG LN) downgraded at Deutsche Bank, Volvo Cars (VOLCARB SS) downgraded at Nordea, Wizz Air (WIZZ LN) downgraded at HSBC.

NOTABLE MOVERS:

• Virbac (VIRP FP) +7.8%: Q1 update.


• Antofagasta (ANTO LN) +2.5%: Reiterated at Morgan Stanley.


• Glencore (GLEN LN) +2.3%: Reiterated at Morgan Stanley.


• Carrefour (CA FP) +2.2%: Upgraded at Berenberg.


• Anglo American (AAL LN) +1.8%: Reaffirmed at Morgan Stanley.


• BP (BP/ LN) +1.4%: PT raised at JPM and Raymond James.


• Elior (ELIOR FP) -2.6%: Deutsche Bank downgrade.


• Wizz Air (WIZZ LN) -3.5%: Downgraded at HSBC, PT cut at Barclays.


• ITV (ITV LN) -3.6%: Downgraded at Berenberg.

Our full European pre-market equity briefings for April 19th can be accessed here and here. Our 'Day Ahead' calendar can be accessed here.

19 Apr 2022 - 08:15- Research Sheet- Source: Newsquawk