EUROPEAN EQUITY OPEN: Stocks open with a degree of caution ahead of Powell and Lagarde at Jackson Hole

EUROPEAN OPEN: The Euro Stoxx 50 gauge of European blue chips is on course for a second straight week of losses, though the broader Stoxx 600 index is on course for some modest gains. European equities are starting the last trading day of the week with losses, though the pre-market downside in futures contracts were pared back after headlines said China was issuing nationwide guidance on the easing of mortgage rules (see here). Closer to home, German GDP data for Q2 was unrevised, dispelling some concerns that a negative revision might drag down the aggregated Eurozone growth stats (see below for analysis). Bunds have eased in wake of the data, while traders will eye the Ifo survey later in the morning. In the UK, Gfk consumer confidence improved in August, in contrast to some of the other gloomier data out of the UK of late (see below for analysis). The main focus today is Fed Chair Powell and ECB President Lagarde’s appearances at the Kasnas City Fed’s Jackson Hole Economic Symposium; we provide previews for both below. 

STOCK SPECIFICS: Of note for Watches of Switzerland (WOSG SW), and other luxury names, Rolex is to buy Bucherer, which some analysts say may have retail implications on Watches of Switzerland. In the automakers sector, Mercedes-Benz (MBG GY) is reportedly considering EV charging stations in Japan, while Aston Martin (AML LN) was upgraded to Buy from Hold at Jefferies. European retailers will note earnings from US peer Gap (GPS), whose shares rose 1.5% following mixed results, and despite reporting declining sales across all brands and warning of "uncertain consumers". In communications technology, Ericsson (ERICB SS) and China's Huawei renew their global patent license agreement; Ericsson estimates FY23 IPR licensing revenues to be approx. SEK 11bln. Of note for UK utilities, the Ofgem Energy Price Cap was lowered -7.3% to GBP 1,923 (prev. 2,074) for dual-fuel households between October-December. It is the first time that UK average energy bills have fallen below GBP 2,000 since April 2022. Our full European equity briefings for August 25th can be accessed here and here.

GERMANY GDP: The detailed release of Q2 GDP was unrevised at 0.0% Q/Q (exp. 0.0%, flash 0.0%), confirming that the German economy came out of recession after contracting in Q4 and Q1. Analysts said the data was somewhat at odds with survey data and other hard data in Q2, though the economy was only able stagnate, as opposed to mustering any growth. Destatis highlighted that developments were mixed across sectors. Nevertheless, the unrevised number bodes well for the upcoming revision to the Eurozone Q2 growth metrics - some were concerned that a negative German revision might weigh on the wider Eurozone data.

UK CONSUMER CONFIDENCE: UK GfK Consumer Confidence improved to -25.0 in August (exp. -29.0, prev. -30.0), with the survey compiler noting that the mood became more constructive amid lower inflation. "While the financial pulse of the nation is still weak, these signs of optimism are welcome during this challenging time for consumers across the UK." Reports note that the improvement in the GfK survey contrasts with other recent downbeat data on consumer spending.

TODAY’S AGENDA:

25 Aug 2023 - 08:10- Fixed IncomeData- Source: Newsquawk

Fixed IncomeFederal ReserveGermanyECBCentral BankEuropePresidentUnited StatesDataUnited KingdomConsumer ConfidenceEquitiesGross Domestic ProductAML.LNGPS.USERICB.SSAmlin PLCGap Inc/TheSwedenFOMCEUREuropean OpeningUSD/SEKBaker Hughes IncMonetary PolicyGerman BondsMBGForexMercedes Benz Group AGAutomobile ManufacturersAutomobilesAutomobiles & ComponentsSEKEURO STOXX 50DAX 40 IndexUSDChinaGBPHighlightedEU SessionAsian SessionResearch SheetSwitzerlandJapanAsia

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