EUROPEAN EQUITY UPDATE: Bourses bounce in thin newsflow but remain negative on the week

Analysis details (09:36)

Bourses are firmer across the board, Euro Stoxx 50 +1.8%; however, the move has occurred during a period of limited fundamental updates and thus seems to be more a recuperation of recent pressure. While the upside is notable, indices still have some way to go before nearing the week’s best levels at, for instance, 3969 in the Euro Stoxx 50 cash and its opening mark of 3932 vs today’s 3871 peak. US futures are in-fitting with this but, as has been the case recently, magnitudes are a touch slimmer ahead of the arrival of US participants compared to their European participants, ES +0.5%. Unsurprisingly, sectors are all in the green. Basic Resource names are experiencing noted outperformance as base metals are performing well in general this morning while Banking Names are a near second taking impetus from yields resuming their rally. Given the risk tone, the relative underperforming sectors are those with more of a defensive bias. Elsewhere, the first round of the French election is on Sunday, which will narrow the field down to two candidates, likely incumbent-Macron and Le Pen. On the election, Goldman Sachs baseline view is for Macron to be re-elected and they foresee a rebound in domestic French stocks with strong fundamentals. However, in the scenario that Le Pen is elected (reminder, Thursday saw the first poll looking for Le Pen to win in the second round/run-off between her and Macron – second round occurs on April 24th) GS believes that Euro Stoxx 50 could drop by 5-7%.

08 Apr 2022 - 09:35- MetalsResearch Sheet- Source: Newsquawk