EUROPEAN EQUITY OPEN: Stocks underpinned by US tariff 'exemptions'; GS cuts Stoxx 600 price target; WG/ LN receives new Sidara offer; AGS BB buys Esure for EUR 1.51bln; HSBA LN explores private credit partnerships

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  EUROPEAN OPEN: European equities are starting the new week on the front foot, underpinned by news on Friday about tariff exemptions on electronic goods. The news has served to boost risk sentiment, but elevate uncertainty around US trade policy; while these products were temporarily exempt from tariffs, Trump indicated that they could soon face additional levies, creating volatility for tech investors. APAC equities rose following the US move to exempt certain tech products from tariffs, despite Trump suggesting that the tariffs may still be implemented. Middle Eastern geopolitics has also provided some cause for optimism; Iran and the US agreed to extend talks following “constructive” discussions in Oman over the weekend regarding Iran’s nuclear programme; both parties will meet again in a week. Meanwhile, Italian assets are in focus after S&P surprised by upgrading Italy on Friday; S&P upgraded Italy’s credit rating to BBB+ from BBB with a stable outlook, citing reduced deficits and resilient exports, despite weak growth and rising debt. Today’s docket is thin for scheduled releases, ahead of a busy week for macro releases, including an ECB policy announcement on Thursday, where it is expected to cut rates.


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  STOCK SPECIFICS: Goldman Sachs cut its Stoxx 600 target to 520 in 12-months (prev. 570), citing tariff-driven uncertainty and rising US recession risk; it also sees FY25 EPS -7%. Tech names are being supported after the ‘procedural’ exemptions that were granted to the smartphone, computer, and chip products on Friday; President Trump has reiterated that existing tariffs on electronics remain in place, and that exemptions granted were procedural, and reaffirmed plans to impose further levies ahead. Of note for UK retail names, retail bosses have raised concerns of Chinese product ‘dumping’ into the UK and European markets through platforms such as Temu, Shein and Amazon (AMZN) amid Trump tariffs, according to the FT; retailers worry about safety risks and tax evasion, especially as Chinese factories shift sales from the US to Europe amid tariff changes. Of note for UK real estate, Rightmove reported house price growth of +1.3% Y/Y in April, (prev. 1.0%), with prices rising 1.4% M/M (prev. 1.1%); Rightmove said “increased choice seems to be bringing more movers into the market, with both buyer and seller numbers up as the market remains resilient.” In M&A and deals, UK’s Wood Group (WG/ LN) received a conditional bid from Dubai-based Sidara at GBP 0.35/shr, plus a potential GBP 450mln cash injection. BNP Paribas Cardif (BNP FP) acquisition of Axa’s (CS FP) asset management business is seen closing in early July; BNP Paribas said its CET1 impact would be -35bps, and added that there would be no changes to its dividend policy, profitability targets, or growth trajectory. Salzgitter (SZG GY) ended takeover talks with a consortium led by GP Gunter Papenburg and TSR Recycling due to valuation differences, while doubling its cost-cutting target to EUR 500mln and citing future demand growth. Ageas (AGS BB) has agreed to acquire UK insurer Esure from Bain Capital for EUR 1.51bln in cash, aiming to expand market share and digital capabilities; completion is expected in H2 2025. HSBC (HSBA LN) is exploring entry into private credit via partnerships, aiming to boost revenue post-restructuring; no full-scale push is planned. Nexans (NEX FP) launched a share buyback programme for 750k shares, with repurchased shares to be cancelled. In healthcare, the European Commission approved Roche’s (ROG SW) Columvi as the first bispecific antibody for diffuse large B-cell lymphoma after initial therapy. Sandoz (SDZ SW) has filed a US antitrust lawsuit against Amgen (AMGN), alleging it unlawfully used patent rights to block competition to its arthritis drug Enbrel, preventing Sandoz’s biosimilar Erelzi from launching and maintaining monopoly profits through 2029.

TODAY’S AGENDA:

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  DAY AHEAD: The week begins on a quiet note for data releases. The NY Fed’s Survey of Consumer Expectations is the highlight. Fedspeak today comes via Waller (voter), who will speak on the economic outlook, and Fed’s Harker (2026 voter) who will give remarks on ‘the role of the Federal Reserve’, and Fed’s Bostic (2027 voter) will speak afterhours. Notable earnings reports due today include Goldman Sachs (GS), M&T Bank Corp (MTB), and LVMH (MC FP).


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  WEEK AHEAD: Highlights include US retail sales; policy announcements from the BoC and ECB; UK and Aussie jobs data; inflation metrics from Canada, Japan, UK and NZ. This week’s corporate earnings highlights include: GS, JNJ, BAC, ASML, UNH, NFLX, TSM.


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  RECAP - CHINA TRADE: China’s trade surplus narrowed to USD 102.64bln in March (exp. 77.0bln, prev. 170.52bln); Imports -4.3% Y/Y (exp. -2.0%, prev. -8.4%); Exports +12.4% Y/Y (exp. 4.4%, prev. 2.3%), driven by front-loaded shipments before President Trump’s “Liberation Day” tariffs; the export growth far outpaced the 2.3% rise seen in January-February, although exports are expected to slow in the coming months. “President Trump’s fentanyl rounds of tariffs did little to dent China’s exports in March, with growth beating forecasts once again,” ING wrote, “however, several categories already are starting to show the trade-war impacts,” adding that “next month’s bilateral trade data is likely to fall off sharply.”

14 Apr 2025 - 08:10- ForexResearch Sheet- Source: Newsquawk