EUROPEAN EQUITY UPDATE: Sentiment constructive post-Chinese inflation and heading into the EU energy meeting

Analysis details (09:32)

Equities in Europe trade firmer across the board following constructive leads from APAC and Wall Street, with the softer-than-expected Chinese inflation data overnight also lifting spirits. US equity futures are also higher across the board, with the NQ (+0.9%) leading the charge vs the ES (+0.6%), YM (+0.5%), and RTY (+0.4%). It is difficult to ascribe the risk appetite to any particular catalyst given the string of hawkish central bank commentary and geopolitical updates, although markets could potentially be hoping for an EU-wide measure to stem the price pressures arising from energy at today’s energy meeting. The data slate for the rest of the session is thin, although there will be a great deal of focus on European officials meeting on energy. Elsewhere, there are a few Fed officials on the docket, but next week’s CPI data might be a more useful guide on what the FOMC Will do on September 21st.  Elsewhere, the BofA weekly flow show reported some USD 14.5bln in equity outflows, with the US seeing its largest outflow in 11 weeks, Japan seeing inflows resuming, and Europe clocking in the 30th week of outflows. Back to the session, European bourses have extended on the gains seen at the open (Euro Stoxx 50 +1.4%; Stoxx 600 +1.2%), with sectors in the region all in the green but portraying a clear anti-defensive bias – Utilities, Healthcare, Food & Beverages, Media, and Personal Care reside at the bottom of the bunch. On the flip side, Basic Resources charge ahead as base metals soar amid the decline in the Dollar and the softer-than-expected Chinese inflation metrics – which also diminish the prospect of Chinese intervention. Banks also benefit from the rise in yields. In terms of movers, Royal Mail (+3.4%) rises after unions called off strike actions on account of Queen Elizabeth’s passing. Deutsche Telekom (+2.4%) benefits from T-Mobile’s share repurchase announcement, with Deutsche Telekom owning a large stake in T-Mobile. Airbus (+1.0%) initially opened lower following a disappointing delivery announcement.   

09 Sep 2022 - 09:32- Research Sheet- Source: Newsquawk

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