EUROPEAN EQUITY UPDATE: Stocks in narrow ranges awaiting the next macro catalyst

STOXX 600: +0.3%

• European bourses opened modestly firmer across the board and have traded within a tight range thus far, given the lack of pertinent updates.


• To recap some trade headlines; US and Japan are expected to hold talks this Friday, via Kyodo. Elsewhere, Reuters reported that the US Treasury does not anticipate any trade deal announcements at the G7 Finance Meeting in Canada this week.


• In geopolitics, US President Trump stated that Russia and Ukraine are to immediately begin negotiations on a ceasefire and an end to the war – after his phone call with Russian President Putin. This has seemingly had little impact on Defence names in Europe, perhaps given the lack of details.


• Recapping the day’s events so far; ECB’s Schnabel suggested that disinflation is on track and highlighted the two-way risks of tariffs on inflation. In the UK, BoE’s Pill explained his dissenting vote at the most recent BoE meeting – highlighting his preference for “cautious and gradual” cuts; but the Chief Economist did suggest that the path from here is downwards and does not want his dissent to be seen as favouring a halt.


• Ahead, EU Consumer Confidence and a couple more ECB speakers.

Sectors: Positive

• European sectors are mixed, and aside from the top performer, the breadth of the market is fairly narrow.


• Utilities takes the top spot, with sentiment in wind names boosted after the Trump administration lifted a stop-work on Equinor’s (+1.3%) New York offshore wind farm project; the name is higher by around 1.5% - peers such as Orsted (+14%) have also been edging higher.


• Chemicals is found towards the bottom of the sectoral list, with losses driven by BASF (-2%); the Co. moves lower after receiving a downgrade at Jefferies.

Majors: FTSE 100 +0.5%, DAX 40 +0.2%, CAC 40 +0.1%

• FTSE 100 is the best performer in Europe today, with a few trading updates to note today. Diploma (+16.7%) tops the pile after reporting strong HY results and upgrading its guidance; Smiths (+2.5%) also benefits post-earnings, where it reported +10.6% Y/Y growth in Organic Revenue. Vodafone (+2%) reported a miss on both top- and bottom-lines, but benefits after the Co. announced a EUR 2bln buyback. Finally, bakery chain Greggs (+6%) edges higher after reporting a +7.4% Y/Y growth in Total Sales and affirming its guidance.

US Equity Futures: ES -0.3%, NQ -0.3%, RTY -0.2%

• Futures are modestly lower across the board, in contrast to a mostly positive APAC/Europeans session.


• The US data docket is exceptionally thin, but there are a slew of Fed speakers to keep traders busy; Bostic, Barkin, Collins, Musalem, Kugler, Daly & Hammack are all due.

20 May 2025 - 09:55- ForexGeopolitical- Source: Newsquawk