EUROPEAN EQUITY UPDATE: Choppy and indecisive trade ahead of CPI

Analysis details (10:15)

European bourses opened on the backfoot following the negative lead from futures and after a modestly firmer European close yesterday. As the Wall St. lead into APAC was downbeat, though overnight performance itself was somewhat resilient – focussed on central bank activity, and looking to the day’s risk events. Sectors are mostly in the red, with defensive-inclined names lagging, though energy outperforms following the mixed performance at yesterday’s close where energy was notably soft. Following the cash open, price action has been somewhat two-way with a brief bout of upside fizzling out and then resurfacing shortly after, action which occurred in very limited news flow and as such is likely pre-US CPI positioning. On this, the Newsquawk preview is available. Specifically, US futures are little changed overall on the session, ES +0.2%, moving between incremental positive and negative skews amid the aforementioned action. Further out, the docket for today is very light so focus is firmly on CPI and associated Fed implications, even though it’s not their preferred release, given the last reading was sufficient to prompt a 75bp move. Elsewhere, and as we move into European earning season in the next few weeks, Barclays writes that Q2 results should broadly speaking be okay; however, the guidance remains crucial which they expect to be cautious. On valuations, Barclays writes that while adjustments largely seem to have been completed they believe an earnings reset is required in order for the space to find a “sustainable bottom”.

13 Jul 2022 - 10:15- Fixed IncomeData- Source: Newsquawk