EUROPEAN EQUITY UPDATE: Contained ranges across stocks amid holiday-thinned trade, lack of catalysts and upcoming risk events (next week)

Analysis details (09:35)

Equities in Europe trade flat with a downside bias across most bourses following a mixed APAC handover and a subdued Wall Street session. Newsflow throughout the European morning has been light with markets experiencing somewhat of a holiday lull. US equity futures are modestly firmer to the tune of +0.1/0.2% across the main contracts with participants on the lookout for the next catalyst ahead of a risk-packed week next week, which sees US CPI alongside a slew of central banks including the Fed, BoE, and ECB. Analysts at JPM “believe that further market and economic weakness may occur as a result of central bank overtightening. In particular, we think that Europe entered recession and that the US will follow later next year.” Over in Europe, bourses are mixed with the breadth of the market narrow (Euro Stoxx 50 +0.1%; Stoxx 600 -0.1%) with macro newsflow quiet and the calendar ahead light, aside from a couple of ECB speakers including ECB’s Villeroy and President Lagarde. Sectors in Europe are mostly lower with no overarching bias. Energy stands as the outperformer with Basic Resources flipping from its initial underperformance after reports suggested China is said to be mulling further property market easing measures at next week's economic meeting, according to Bloomberg sources – which resulted in gains across base metals on a rosier demand outlook. Telecoms reside as the current laggard with Vodafone (-2.7%) towards the bottom of the Stoxx 600 as it pares back some of yesterday’s gains on the back of Co’s largest shareholder boosting its stake. Real Estate is softer as UK homebuilders are pressured after the RICS Housing Survey in November saw the most widespread house price falls since early in the COVID-19 pandemic. Tech resides around the middle of the bunch as ASML (-0.3%) trims the losses seen at the open which were a result of the Netherlands planning curbs on tech exports to China under an agreement with the US. In terms of individual movers, Airbus (+1.4%) is firmer after the US FAA approved special conditions for the Airbus A321XLR while its CEO said an inflation spike for two years would be relatively easy for the industry to absorb, 3-5yrs would be "very difficult". Renault (-0.3%) is softer after Bloomberg sources suggested discussions between the Co. and Nissan (77201 JT) are certain to spill into next year.

08 Dec 2022 - 09:35- Research Sheet- Source: Newsquawk