EUROPEAN EQUITY UPDATE: Stocks subdued awaiting US data and Fed Chair Powell

STOXX 600: -0.4%

• Subdued sentiment across Europe after the predominantly lower APAC handover, and following the mixed handover from Wall St, where the major indices were somewhat choppy and small caps underperformed as yields edged higher.


• Newsflow this morning has been light but earnings picked up, whilst current focus remains on geopolitical ongoings with US President Trump in the Middle East, consolatory language from Iran, and a likely no-show from Russia President Putin in Russia-Ukraine peace talks in Turkey.


• Data out of the UK showed GDP growth of +0.2% M/M in March (exp. 0.0%), and the annual rate pared to +1.1% Y/Y (exp. 1.0%, prev. 1.4%); the 3M/3M estimate rose to 0.7% in March (exp. 0.6%, prev. 0.6%). That leaves the preliminary estimate for Q1 GDP at 0.7% Q/Q (exp. 0.6%), and the annual rate of growth at 1.3% Y/Y in Q1 (exp. 1.2%, prev. 1.5%). The UK stats office noted that the economy grew strongly in Q1, mainly driven by broad-based services growth, including wholesale, retail, computer programming, car leasing, and advertising; production also rose significantly after prior decline, but slight falls were seen in education, telecoms, and legal services


• The data slate is busy today, with Eurozone employment and GDP figures, NY Fed Manufacturing, US Jobless Claims, PPI, Retail Sales and Industrial Production; today's speakers slate includes Fed Chair Powell, who will give opening remarks at a framework review conference.

Sectors: Mostly Negative

• Mostly a defensive bias and in line with the cautious mood across the markets.


• Hefty losses in Energy amid declines in oil prices following constructive updates on the US-Iran front, with Iran hinting at disposing of its highly enriched uranium stockpile, whilst US President Trump suggested the US is getting close to a deal with Iran.

Others: DAX 40 -0.2%, FTSE 100 -0.5%, IBEX 35 -0.1%

• Allianz (-3.2%) Q1 operating profit rose +6.3% Y/Y to a record EUR 4.24bln, matching estimates.


• Deutsche Bank (+0.6%) agreed to sell its CollerEquity secondary private equity fund, with over USD 800mln in net assets, to wealthy European and Asian clients, responding to growing demand for alternative investments.


• Deutsche Telekom (-0.8%) raised its 2025 earnings forecast after Q1 adj. EBITDA topped estimates; growth was supported by a 1.8% increase in German mobile subscribers to 69.8mln.


• Ubisoft (-18.3%) reported a 20.5% fall in FY net bookings to EUR 1.85bln due to delayed releases and underperforming titles; for FY25-26, expects stable net bookings, highlighting a strong back catalogue sales and new releases.


• Merck KGaA (-4.9%) cut its FY25 outlook, citing a weak US dollar and tariff uncertainty; now expects organic sales growth of +2-6% (prev. saw +3-6%) and organic adj. EBITDA growth of +2-7% (prev. saw +3-8%).

US Equity Futures: ES -0.5%, NQ -0.5%, YM -0.6%, RTY -0.4%

• Subdued trade across US equity futures, in line with the performance in Europe.


• Participants await the raft of US data including US NY Fed Manufacturing, Jobless Claims, Philly Fed Index, PPI, Retail Sales & Industrial Production, whilst markets also await commentary from Fed Chair Powell.


• Notable corporate earnings reports due today include: BABA, DE, WMT, AMAT, TTWO.

15 May 2025 - 09:55- ForexData- Source: Newsquawk