EUROPEAN EQUITY UPDATE: European stocks in limbo but US futures drift lower

Analysis details (09:54)

European equities have conformed to indecisive trade but with a mild downside bias as the region gets its first chance to react to the FOMC, and after Wall Street closed at session highs whilst APAC was also feeling continued euphoria from China’s intervention yesterday. US equity futures have been consolidating with mild losses (ex-RTY) throughout the European morning following the Wall Street bounce. To recap, the Fed lifted rates by 25bps, with Chair Powell confident that the economy was strong enough to weather tighter monetary policy. Traders also cited yesterday’s risk appetite to some progress in Russia/Ukraine talks, although some officials fear Russia may be providing false optimism to buy time. Headline risk persists, but today the main scheduled event will be the BoE which the MPC is expected to unanimously lift rates by 25bps (full preview available in the Newsquawk Research Suite). European stocks have given up the gains seen at the cash open with the mood now more indecisive (Euro Stoxx 50 Unch; Stoxx 600 +0.1%) as the tone around the Russia-Ukraine negotiations signals less progress than hoped – with the Ukrainian Defense Minister stating that so far there is “nothing to satisfy us in negotiations with Russia”. He added a peaceful solution can be reached with Russia, but "on our terms". In terms of analyst action, Oddo has cut their Stoxx 600 year-end forecast to 492 from 556 (450 at the time of writing) citing a hit to economic growth. Back to the session, sectors in Europe do not portray a particular theme, but Energy has made its way up the ranks since the open as crude prices nurse some recent losses, whilst UK assets remain in limbo ahead of the BoE. In terms of individual movers, Atos (+6.3%) is firmer amid reports that Airbus (Unch) is said to be interested in taking over Atos' cybersecurity business, according to sources cited by BFM TV. Earnings have fuelled gains in Deliveroo (+8.6%) and Veolia (+1.4%), whilst Thyssenkrupp (-10.5%) is hit on a guidance suspension, and FLSmidth (-0.4%) is pressured amid an investigation amid possible EU sanctions breaches related to Belarus.

17 Mar 2022 - 09:53- Fixed IncomeResearch Sheet- Source: Newsquawk