Yesterday, European stocks rebounded. The Stoxx Europe 600 Index increased 0.4%, Germany’s DAX 30 gained 1.2%, France’s CAC 40 added 0.7%, and the U.K.’s FTSE 100 was up 1.1%.
70% of STOXX 600 constituents traded higher yesterday.
40% of the shares trade above their 20D MA vs 34% Friday (below the 20D moving average).
42% of the shares trade above their 200D MA vs 41% Friday (below the 20D moving average).
The Euro Stoxx 50 Volatility index eased 0.68pt to 34.49, a new 52w high.
SECTORS vs STOXX 600
3mths relative high: Chemicals
3mths relative low: Energy
Europe Best 3 sectors
technology, real estate, personal & household goods
Europe worst 3 sectors
banks, telecommunications, insurance
The 10yr Bund yield fell 1bp to -0.48% (below its 20D MA). The 2yr-10yr yield spread fell 0bp to -22bps (above its 20D MA).
UK 07:00: Q1 Current Account, exp.: £-5.6B
UK 07:00: Q1 Business Investment YoY final, exp.: 1.8%
UK 07:00: Q1 Business Investment QoQ final, exp.: -0.5%
UK 07:00: Q1 GDP Growth Rate QoQ final, exp.: 0%
UK 07:00: Q1 GDP Growth Rate YoY final, exp.: 1.1%
UK 07:00: Jun Nationwide Housing Prices YoY, exp.: 1.8%
UK 07:00: Jun Nationwide Housing Prices MoM, exp.: -1.7%
FR 07:45: Jun Harmonised Inflation Rate MoM Prel, exp.: 0.2%
FR 07:45: Jun Harmonised Inflation Rate YoY Prel, exp.: 0.4%
FR 07:45: Jun Inflation Rate MoM Prel, exp.: 0.1%
FR 07:45: May Household Consumption MoM, exp.: -20.2%
FR 07:45: May PPI MoM, exp.: -2.9%
FR 07:45: Jun Inflation Rate YoY Prel, exp.: 0.4%
EC 10:00: Jun Core Inflation Rate YoY Flash, exp.: 0.9%
EC 10:00: Jun Inflation Rate YoY Flash, exp.: 0.1%
EC 10:00: Jun Inflation Rate MoM Flash, exp.: -0.1%
UK 00:01: Jun Gfk Consumer Confidence, exp.: -36
In Asian trading hours, EUR/USD was broadly flat at 1.1242 while GBP/USD held above the 1.2300 level. USD/JPY rose further to 107.73. This morning, official data showed that Japan’s industrial production declined 8.4% on month in May (-5.7% expected), while jobless rate rose to 2.9% (2.8% expected) from 2.6% in April. AUD/USD was little changed at 0.6876. Earlier today, China’s official Manufacturing PMI edged up to 50.9 in June (50.5 expected) from 50.6 in May and Non-manufacturing PMI climbed to 54.4 (53.6 expected) from 53.6.
Spot gold slipped to $1,769 an ounce.
#UK – IRELAND#
InterContinental Hotels Group, a hospitality company, published a trading update: “The pace of hotels reopening has continued to accelerate through the second quarter, with only 10% of the global estate currently still closed. (…) We expect to report a comparable RevPAR decline of ~(75)% for Q2 (resulting in ~(52)% for H1), including (82)% in April, (76)% in May and an estimated (70)% for June.”
Smiths Group, a diversified engineering group, released a trading update: “For the ten months ended 31 May 2020, underlying revenue for Continuing Operations was up +2%. (…) For the four months of the second half ended 31 May 2020, underlying revenue was up +1%. (…) The resilient overall performance of the last four months reflects the momentum of the first half and our strong orderbooks at the outset of the COVID-19 crisis. (…) The Group announces today a strategic restructuring programme (…) The programme is Group-wide and has an operating cash cost of c.£65m which will be spread across FY2020 and FY2021. Savings will substantially offset costs in FY2021 and deliver the full annualised benefit of approximatively £70m from FY2022 onwards.”
AstraZeneca, a biopharmaceutical company, said its selumetinib has been granted orphan drug designation in Japan for the treatment of neurofibromatosis type 1 (NF1), a rare and debilitating genetic disease. From a chartist point of view, the push above the 2020 January top releases a new upward potential towards 10000p. Prices and the RSI indicator are also supported by rising trend lines.
Rotork, a flow control and instrumentation group, posted a trading update: “In the April – May period, revenues were down 14% YoY on an OCC basis equalised for working weeks. We anticipate that, subject to no additional COVID-19 related disruption, Group revenues in the first half will be circa 11-13% down YoY, and whilst adjusted Group operating profits will be lower, margins will be relatively resilient.”
#GERMANY – AUSTRIA#
Allianz, an insurance group, was downgraded to “neutral” from “buy” at Citigroup.
EDF, an integrated energy company, is considering selling its waste-to-energy business Dalkia Wastenergy for 200 million euros, reported Bloomberg citing people familiar with the matter.
AXA, an insurance company, was downgraded to “neutral” from “buy” at Citigroup.
Scor, an reinsurer, was upgraded to “buy” from “neutral” at Citigroup.