EUROPEAN EQUITY OPEN: Stocks open in the green, FTSE100 lags ahead of BoE

OVERNIGHT: On Wall Street, stocks were mixed (Dow underperformed, Nasdaq outperformed) as Treasury yields narrowed following US CPI data, which didn’t contain any hawkish surprises, as some were fearing following hot payrolls last week. Afterhours, DIS slipped following its results, HOOD gained. Our US wrap can be accessed here. APAC stocks were also mixed. China reported softer inflation data which supported arguments of a slow economic rebound ahead, while factory gate prices saw deeper deflation. (see below). Aussie share markets saw weakness in utilities and commodity sectors overshadowing outperformance in tech and after consumer inflation expectations ticked higher. Japanese shares were indecisive, and the BoJ’s Summary of Opinions provided very little in the way of fresh insight. Our APAC wrap is here.

EUROPEAN OPEN: Indices are in the green after the open, though the FTSE100 lags ahead of the BoE rate decision, where a 25bps hike is largely expected (see below). ECB's German representative Nagel is giving further remarks in premarket trade, largely reiterating his view that rate hikes are not over, and the central bank has more to do since inflation remains stubborn (see here). For EUR currency traders, it is worth highlighting the very lumpy expiries rolling off at today’s NY cut, with particular focus between 1.0950-1.10 (see here). There has also been some early comments this morning from US Treasury Secretary Yellen, who gave remarks ahead of the G7 meetings in Japan; Yellen reiterated remarks from the weekend, urging Congress to raise the debt ceiling, and cautioned that a US default would result in economic and financial catastrophe. On the corporate earnings slate, it has been another busy morning, and we include some highlights below.

STOCK SPECIFICS: Bayer (BAYN GY) Q1 adj. EBITDA missed expectations, and it said it sees FY23 results at the lower end of guidance ranges. Merck (MRK GY) revenue was in line with expectations, though it flagged a decline in operating profits for FY23. Siltronic (WAF GY) posted subdued results, and sees no recovery in H2 as end markets are expected to stagnate. Deutsche Telekom (DTE GY) upped its profits outlook after Q1 numbers topped expectations. Thyssenkrupp (TKA GY) boosted cash flow guidance despite losses in steel. Dutch bank ING (INGA NA) Q1 numbers beat expectations, and it launched a share buyback. Hapag-Lloyd (HLAG GY) sales topped expectations, though profits fell, and it confirmed guidance. Rolls-Royce (RR/ LN) trading update noted it was on track and flying hours are continuing to recover. Our full equity briefings for May 11th can be accessed here and here.

DAY AHEAD:

11 May 2023 - 08:10- Fixed IncomeData- Source: Newsquawk

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