EUROPEAN EQUITY UPDATE: Sentiment steady ahead of high-level meetings, Fed speak in focus

Analysis details (10:10)

European bourses kicked off Friday’s session with a modestly firmer cash open in-fitting with the indications from futures before hand, Euro Stoxx 50 +0.2%. An open that followed a softer APAC handover, but, benchmark performance in the region had been picking up amid reports that US Secretary of State Blinken had accepted an initiation from Russian Foreign Minister Lavrov, prompted by a US letter, for a meeting next week in Europe. Additionally, Russian Defence Minister Shoigu is the speak with his US counterpart Austin later on Friday, at the US’ request – timing TBC. Meeting/conversations that will be eyed for any firm commitment, and subsequent follow-through, towards a Ukraine de-escalation as well as proving another opportunity to gauge the general feeling towards Russia’s security proposals. In the US, futures are firmer across the board taking greater impetus from the above developments than their European peers, though focus in the US will turn to upcoming Fed speak with Williams & Brainard on the docket – with participants seeking fresh guidance on how engrained the increasingly hawkish rhetoric is. Reminder, overnight Bullard (2022 voter) said an unscheduled FOMC is not imminent, but something to think of, and 100bp of hikes could be managed in multiple ways. Back to European bourses, where performance is now mixed around the unchanged mark as there have not been any substantial updates to the geopolitical front following the aforementioned meeting reports. As such, the sectoral breakdown is dictated by corporate updates as Personal Care Drug & Grocery Store names outperform in a continuation of Reckitt’s (+2.4%) strong performance post earnings, while L’Oreal (+1.8%) lifts the Consumer Products/Services sector post-earnings. Banking names are torn between a Q4 report from NatWest (-3.8%) where they missed modestly on revenue and positive broker action for the likes of Sabadell (+1.7%) and CaixaBank (+0.8%). Other notable movers include Allianz (-1.6%) as the warn of a EUR 3.7bln charge in relation to Pacific Investment Management, cautioning that there could be further costs ahead. Elsewhere, EDF (-5.0%) is the Stoxx 600 laggard in-spite of above-exp. Headline earning metrics as it announces another round of asset sales aiming to raise EUR 3bln and a EUR 2.5bln rights issuance.

18 Feb 2022 - 10:10- Fixed IncomeBank Speaker- Source: Newsquawk