EUROPEAN EQUITY OPEN: Indices open on the front foot as hawkish FOMC reaction faded, progress in Ukraine/Russia talks, prospects of Chinese policymaker support

INDICES: At 08:12GMT, Euro Stoxx 50 +0.2%, FTSE 100 +0.2%, DAX 40 +0.0%, CAC 40 +0.4%, FTSE MIB +0.1%, IBEX 35 +0.6%, SMI +0.2%. Sectors are broadly higher, with gains being led by Travel & Leisure, Basic Resources, Banks and Tech.

OPEN: European equities rose slightly at the open, following gains on Wall Street after the Fed lifted rates by 25bps, with Chair Powell confident that the economy was strong enough to weather tighter monetary policy. Traders also noted some progress in Russia/Ukraine talks, while Asia traders continue to be encouraged by the prospect of Chinese policymaker support amid a resurgence in COVID cases. Today, the focus in Europe will be on the BoE which is expected to lift rates by 25bps (our preview is here). Elsewhere, final HICP for the Eurozone is due at 10:00GMT, Turkey's central bank is expected to hold rates at 11:00GMT; from the US, housing starts, building permits, weekly jobless claims data, and the Philly Fed survey are all due at 12:30GMT, while industrial and manufacturing production data will be released at 13:15GMT. On the speakers front, ECB's President Lagarde, Chief Economist Lane and Markets chief Schnabel are all due to speak today; there is no scheduled Fed speak, although we expect Fed officials to resume jawboning following the blackout - hawk Bullard will at some point explain his call for a 50bps hike, although he has already made the case for a larger increment rate rise before the Fed went into blackout. Full Day ahead here.

STOCK SPECIFICS: TotalEnergies (TTE FP) reportedly cuts costs at French stations by around EUR 0.10/litre, and separately, the Church of England pensions board urges Total to reconsider its plans to retain Russian assets, and is assessing its shareholdings in Total. ThyssenKrupp (TKA GY) suspends FY22 FCF forecasts ex-M&A due to present geopolitical and economic turmoil; still expects Q2 adj. EBIT to increase Q/Q. Airbus (AIR FP) is said to be interested in taking over Atos (ATO FP) cybersecurity business. MorphoSys (MOR GY) results were soft. UBS (UBSG SW) to sell holding in Japanese real estate JV to KKR. HSBC (HSBA LN) is increasing climate commitments following investor pressure, will phase down fossil fuel financing. AstraZeneca (AZN LN) reaches settles Ultomiris litigation, which will not impact FY22 guidance. In notable broker moves, HeidelbergCement (HEI GY) upgraded at JPMorgan; Diageo (DGE LN) upgraded at JPMorgan.

NOTABLE MOVERS:

• Polymetal (POLY LN) +4.8%: Progress cited in Russia/Ukraine talks.


• Atos (ATO FP) +3.9%: AIR FP reportedly interested in cyber business.


• Deliveroo (ROO LN) +3.6%: Results.


• Watches of Switzerland (WOSG LN) +2.9%: Swiss watch exports +24.4% Y/Y.


• Renault (RNO FP) -1.5%: European passenger car registrations -5.4% Y/Y.


• Ocado (OCDO LN) -6.5%: lowered its FY outlook.


• ThyssenKrupp (TKA GY) -7.0%: Suspends FY22 FCF forecasts.

Our full European equity briefings for March 17th can be accessed here and here.

17 Mar 2022 - 08:13- Fixed IncomeResearch Sheet- Source: Newsquawk