EUROPEAN EQUITY OPEN: Indices stabilise after recent downside

INDICES: At 08:14BST, Euro Stoxx 50 +0.67% at 3,594; FTSE 100 +0.11% at 7,436; DAX +0.51% at 12,958; CAC 40 +0.54% at 6,256; IBEX 35 +0.73% at 8,048; FTSE MIB 0.00% at 23,877; SMI +0.24% at 10,923.

OPEN: European equities are higher after the Tuesday open, stabilising after recent hawkish central bank rhetoric which weighed on risk assets and has seen fixed income yields higher. The situation remains fluid, with much of the outlook hinging on how Europe handles its energy crisis; Gazprom told Engie (ENGI FP) today that it would reduce gas deliveries over a contractual disagreement, reminding traders that energy flows are still subject to volatility. UK markets are lagging, playing catch-up after traders return from closures on Monday.

STOCK SPECIFICS: On the index level, Abrdn (ABDN LN) and Avast (AVST LN) are poised to be replaced by Fraser Group (FRAS LN) and Homeserve (HSV LN) in the FTSE 100; the reshuffle will be based on Tuesday's closing prices and will take effect mid-September. In industrials, BAE Systems (BA/ LN) is reportedly nearing a multi-billion pound government deal. In energy, Aker Solutions (AKRYY) enters into JV with Subsea 7 (SUBC NO) and Schlumberger (SLB); UK names are also in focus as almost half of UK Conservative party voters support the nationalisation of the energy industry, according to YouGov. In consumer staples, Carrefour (CA FP) is lower after JPMorgan downgraded it to Neutral from Overweight. Our full daily equity briefings can be accessed here and here.

DAY AHEAD: German regional CPI metrics will be released in the morning, ahead of the aggregated national data later today, and ahead of Wednesday’s Eurozone CPI report, which will be key in shaping expectations regarding next week’s ECB, where some are now predicting a 75bps rate hike. EU sentiment indicators are also on the docket. UK credit and lending stats are due in the morning. The US Day will see the release of various house price indices, the Conference Board’s gauge of consumer confidence, and the JOLTS series of job openings data. The central bank speakers slate includes the influential NY Fed President Williams towards the European close, as well as Fed’s Barkin. The API will release its gauge of energy inventories after the US close. Ful Day Ahead here. Traders will also be cognizant of the week’s other major releases, including the China NBS PMI data due overnight, Wednesday’s Eurozone inflation figures, US ISM manufacturing survey on Friday ahead of the key US jobs report on Friday; we talk about all of these events in our week ahead preview, which can be accessed here.

30 Aug 2022 - 08:15- Research Sheet- Source: Newsquawk