EUROPEAN OPEN: Risk sentiment supported after constructive APAC updates; lots of Fedspeak ahead

INDICES: At 08:14BST, Euro Stoxx 50 +0.69% at 3,711; FTSE 100 +0.13% at 7,474; DAX +0.75% at 14,069; CAC 40 +0.44% at 6,376; IBEX 35 +0.85% at 8,424; FTSE MIB 0.00% at 26,227; SMI +0.32% at 11,709.  

OPEN: European shares open on the front foot, with traders citing positive developments in Asia, where the city of Shanghai reported no new COVID cases in quarantine zones for the third straight day, while tech companies in the APAC region were supported on hopes that the crackdown on Big Tech could be easing. Combined, both are offering hopes on global growth amid a landscape where rampant inflation is seeing global central banks aggressively tighten policy to put a lid on price pressures. This morning, data showed that the UK's jobless rate fell to 3.7% in the March period (exp. 3.8%, prev. 3.8%), with the economy adding 83k jobs (exp. 5k, prev. 10k); meanwhile average weekly earnings ex-bonuses were up 4.2% Y/Y (exp. 4.1%, prev. 4.0%), while the measure that includes bonuses rose 7.0% Y/Y (exp. 5.4%, prev. 5.4%). While the data alludes to a tight labour market with wage pressures, Pantheon Macroeconomics said that ahead, it continues to think that the labour market will slacken gradually over the course of the next year, attenuating the upward pressure on wages. Ahead, flash Q1 GDP data for the Eurozone is due (second reading), as well as the Eurozone labour market data for the quarter. The US Day will have a distinct consumer feel, with the release of retail sales for April and earnings from Walmart (WMT) and Home Depot (HD); industrial and manufacturing production are also on the slate. The central bank speakers docket is heavy, with Fed 2022 voter Bullard speaking again, Fed’s Mester (2022), Fed’s Harker (temporary voter), Kashkari (2023); but there will be outsized attention on Fed chair Powell, who is due to speak to the WSJ at 19:00BST/14:00EDT. Fed’s Williams gave no indication that the central bank was relenting on its hawkishness in spite of the market downside seen last week, and Powell is expected to reiterate this message. Our full day ahead can be found here.

NOTABLE MOVERS:

• Imperial Brands (IMB LN) +4.8%: Results, sees trading in line with outlook.


• Daimler Trucks (DTG GY) +4.3%: Results, lifts revenue view.


• Caixabank (CABK SM) +2.8%: 2022-24 strategy targets profitability of over 12% by 2024.


• Vodafone (VOD LN) -2.9%: Results, warns on inflation.


• Adler (ADJ GY) -8.3%: Consus Real Estate will make impairments.

Our full European pre-market equity briefings for May 17th can be accessed here and here. Our 'Day Ahead' calendar can be accessed here.

17 May 2022 - 08:14- Fixed IncomeResearch Sheet- Source: Newsquawk