EUROPEAN EQUITY UPDATE: Sluggish price action continues for European equities

Analysis details (09:30)

European equities (Eurostoxx 50 -0.3%, Stoxx 600 -0.5%) are once again underwater with stocks in the region still unable to catch a bid. The session follows on from a mostly soft APAC one, however, as has been the case for most of the week, the macro drivers in Europe remain the same as participants brace themselves for another large rate hike by the ECB at the end of the month and tensions between Russia and Ukraine remain elevated. Stateside, US futures (ES +0.1%, NQ -0.1%, RTY +0.2%) are trading with little in the way of firm direction in the wake of yesterday’s soft close with the e-mini S&P sub-3600 but north of the weekly low printed on Tuesday at 3579.0. Today’s main data highlight will be the US CPI report at 13:30BST/08:30EDT with the headline Y/Y rate expected to slow to 8.1% from 8.3% and the core Y/Y metric expected to rise to 6.5% from 6.3%. The data will be one of the last pieces of the puzzle officials will want to see ahead of the November 2nd FOMC, where money markets currently price in a 92% chance of another 75bps rate rise, which would take rates to 3.75-4.00%. US earnings season gets underway today with the likes of BlackRock (BLK) and Walgreens (WBA), but further attention will be on Friday’s earnings from the likes of JPMorgan (JPM) and Morgan Stanley (MS). Sectors in Europe are more mixed than they were at the cash open with Energy and Travel & Leisure names outperforming peers. The latter has been in part bolstered by Entain (+2%) following its Q3 update in which it noted that retail gaming revenue continues to deliver with a strong performance and the Co. looks forward to a strong finish to the year. To the downside in Europe, Tech, Consumer Products and Construction names are the laggards. On a stock-specific front, TSMC (TSM) beat on profit, sees Q4 revenue above 2021 levels and noted the US curb on China chip exports impact is limited and manageable. Elsewhere, easyJet’s (-0.8%) opening gains proved to be fleeting after the Co. opted to not recommend a dividend alongside FY22 results. 

13 Oct 2022 - 09:30- Research Sheet- Source: Newsquawk