EUROPEAN EQUITY UPDATE: Wednesday’s equity exuberance wanes as risk events loom

Analysis details (10:42)

Following the significant gains yesterday, the mood across European equities was softer in the run-up to the cash open as traders eyed a myriad of risk events - including the Russia/Ukraine FM meeting (concluded), EU leaders’ meeting, and the ECB statement and presser (full preview available on the Newsquawk Research Suite). US CPI is also on today’s docket, albeit the release will be slightly stale given the invasion of Ukraine since but will nonetheless attract focus ahead of next week’s FOMC. During the morning, the confab between the Russia-Ukraine Foreign Ministers did not bear fruits, with no progress on a ceasefire and little in terms of compromise. Russian Foreign Minister Lavrov said a possible meeting between the Ukrainian and Russian presidents was discussed, but more preparations are needed. European equities were already tilting lower but the pressers did not exert any additional major pressure on the benchmarks as the ECB governing council meets. US equity futures are subdued across the board with deeper losses seen in the RTY (-1.0%) vs the NQ (-0.9%), ES (-0.7%) and the YM (-0.8%). Back to Europe, the cash market is posting varying degrees of losses (Euro Stoxx 50 -2.4%; Stoxx 600 -1.1%) – with the SMI (-0.1%) slightly more cushioned amid its large healthcare exposure and with defensives performing better than cyclical – although Basic Resources and Energy are also in the green as they again piggyback on the recovery of underlying commodities. The other side of the spectrum meanwhile sees Banks, Consumer Discretionary, Retail and Insurance. In terms of individual movers, Rio Tinto (-5.6%) is one of the few miners failing to gain from the broader sectoral rebound as it trades ex-divs and it suspended operations in Russia and halted shipments to Rusal's alumina refinery in Ireland. Meanwhile, shipping-name Hapag-Lloyd (+0.8%) saw a significant improvement in earnings Y/Y with the main drivers of these positive business developments have been significantly improved freight rates resulting from very strong demand for goods exported from Asia, whilst it expects the strained situation in the global supply chains will ease in the second half of the year. State-side, Amazon (+6% pre-mkt) yesterday approves a 20-for-1 stock split (effective from June 6th) and is to buy back up to USD 10bln of company stock.

10 Mar 2022 - 10:39- EquitiesData- Source: Newsquawk