EUROPEAN EQUITY OPEN: Lacklustre start following soft China activity data; ZEW, GDP ECB-speak ahead, as well as US retail sales and debt ceiling talks

EUROPEAN OPEN: It is a lacklustre start to the European session on Tuesday, following disappointing China activity data overnight, which came after disappointing Empire manufacturing data out of the US on Monday. In the UK, data showed that the unemployment rate rose a touch in March; The ONS said that both employment and unemployment both rose again in the first three months of 2023; the number of those neither working nor looking for work continues to fall, although the number of people not working due to long-term sickness rose to a new record. The stats office added that the number of people on employers' payrolls fell in April for the first time in over two years. We recap on the release below. Meanwhile, on the equity specific news front, Diageo (DGE LN) is in focus after a 13F filing by Berkshire Hathaway showed that it purchased a new stake in the alcoholic drinks maker. Delta Air Lines (DAL) is in talks for a large order of Airbus (AIR FP) A350 and A330neo wide-body aircraft. On the earnings front, Vodafone (VOD LN) begins strategic review in Spain, is working to turnaround its German business, and will cut 11k jobs globally; it also forecast flat earnings ahead. Energy names will note that the US Department of Energy announced a plan to buy 3mln barrels of crude oil to add to the Strategic Petroleum Reserve. Our full equity specific briefings for May 16th can be accessed here and here.

REVIEW - UK JOBS DATA: The UK added 182k jobs in March, topping consensus expectations for 160k.The ILO Unemployment Rate rose to 3.9% in March (it was expected to be unchanged at 3.8%). the UK stats office said there were 556k working days lost in March due to labour disputes, up from 332k in February. Average earnings excluding bonuses rose by one-tenth to 6.7% in March, a little short of the expected 6.8%. For the April components, the Claimant Count rose by 46.7k, while the HMRC Payrolls Change for April showed a contraction of 135k. Some analysts suggested that the cooler jobs data may give ease pressure on the MPC to lift interest rates again at its June meeting.


16 May 2023 - 08:10- Research Sheet- Source: Newsquawk

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