EUROPEAN EQUITY UPDATE: Stocks slip but the UK’s FTSE is cushioned by a slide in Sterling

Analysis details (09:52)

The overall mood across markets remains downbeat on quad witching day with participants also setting their sights on next week’s FOMC meeting following the hotter-than-expected US CPI prints this week. The losses in Europe followed on from a downbeat APAC lead which saw Chinese markets underperform despite constructive data, although geopolitical tensions have moved up a notch after Global Times suggested that China will impose sanctions on the CEO of Raytheon Technologies (-1.3%), and Boeing’s (-2.3%) Defense, Space & Security CEO, following recent US arms sales to Taiwan region. US equity futures have been trundling lower with the NQ (-1.2%) underperforming vs the ES (-0.9%), YM (-0.9%) and RTY (-0.8%) at the time of writing. This week’s BofA Flow Show (in the week to Wednesday) noted that equities saw inflows of USD 6.2bln, with the breakdown suggesting that the US saw USD 10.5bln inflows, Europe saw outflows of USD 2.3bln, Japan had inflows of USD 0.2bln, and EM saw inflows resume with USD 0.2bln. Back to the session, Euro-bourses see the deepest losses (Euro Stoxx 50 -1.5%; Stoxx 600 -1.2%), whilst the FTSE 100 (-0.1%) is the relative outperformer as exporters in the index cheer the Pound slumping to its lowest since 1985 against the USD. Sectors are all lower and portray a clear defensive bias, with Healthcare at the top of the bunch and also cushioning the Swiss SMI (-0.2%) due to its large exposure to the sector. The sectoral losers meanwhile include cyclicals Construction & Materials, Industrials, Autos, and Basic Resources. In terms of individual movers, postal names are dragged lower following FedEx’s (-19% pre-market) guidance withdrawal and detailed prognosis of its situation, with Deutsche Post (-6.1%), PostNL (-3.0%), Austrian Post (-3.4%) all lower.

16 Sep 2022 - 09:54- Research Sheet- Source: Newsquawk