EUROPEAN EQUITY UPDATE: Stocks extend losses as trade woes continue to dominate price action

STOXX 600: -1.7%

• European bourses are entirely in the red, in a continuation of the Trump-tariff induced slump seen on Thursday. Since then, US President Trump, when asked about the market response, said "now it settles in" and added he is open to negotiating if "other countries offer something phenomenal."


• Price action has only really been downward today, given the lack of fresh catalysts and with traders mindful of the key NFP report and Chair Powell ahead.


• Aside from a few Construction PMIs (EZ printed a little above the prior), European-specific newsflow has been relatively light.

Sectors: Negative

• European sectors hold a strong negative bias, with only a couple of sectors managing to hold in positive territory.


• Food Beverage & Tobacco outperforms today, largely thanks to the defensive bias in the market; Danone (+2.5%) gains after receiving an upgrade at Morgan Stanley. Also helping is modest gains in alcohol names which generally reacted positively on Thursday, as Trump tariffs on the alcohol sector were seen as better than feared.


• Banks continue to underperform, extending on the prior day’s losses; yields continue to drive lower, and fears of an economic slowdown continue to increase. Elsewhere, Basic Resources and Energy are both markedly lower amid the continued drop in commodity prices.

Majors: FTSE 100 -1.3%, DAX 40 -1.5%, FTSE MIB -3.2%, IBEX 35 -3.1%

• The FTSE 100 is on the backfoot today, albeit performing a little better vs peers. Stock movers today are moving more at the whim of the recently announced trade developments rather than any single stock-specific driver; Banks such as NatWest (-5.4%) and HSBC (-4.3%) underperform given the yield environment and increased fears of an economic slowdown. Mining names are continuing the descent seen in Thursday’s trade; Glencore (-4.7%), Fresnillo (-4.5%). As for stock specifics; BP (-2%) said Chairman Helge will step down in "due course", amid continued pressure from investors.


• The FTSE MIB and IBEX 35 are both underperforming today, given their high exposure to European banking names; for the reasons mentioned above. Specifically for Santander (-6.5%) the Spanish bank affirmed all of its 2025 targets and expects continued growth in Q1.


• In terms of stock specifics; Gerresheimer (-11%) sank at the open and continues to dip after Bloomberg reported that KKR dropped out of a consortium seeking a takeover for the company; though the article highlighted that Warburg Pincus is still working to see if it can reach a deal.

US Equity Futures: ES -0.7%, NQ -0.5%, RTY -1.2%

• Futures are broadly on the backfoot, continuing the downside seen in the prior session which saw US stocks see their worst day since the Covid pandemic, in reaction to Trump's “Liberation Day” announcements.


• US jobs numbers are due, where 135k nonfarm payrolls are expected from the prior 151k; the unemployment rate is seen unchanged at 4.1%, while average earnings are seen declining to 3.9% Y/Y from 4.1%. Fed Chair Powell will be delivering remarks at a business journalism conference (at 16:25BST/11:25EDT; there will be a text and Q&A); we will also hear from the Fed’s Barr on AI (voter; there will be a text and Q&A) and the Fed’s Waller (voter; no text, but there will be a Q&A) on payments in wake of the data’s release.

04 Apr 2025 - 09:55- ForexData- Source: Newsquawk