Last checked at 
* Europe's STOXX 600 on course for third month of gains
* AstraZeneca boosts UK's FTSE 100
* Barclays tumbles after cautious guidance
April 30 - Welcome to the home for real-time coverage of
markets brought to you by Reuters reporters. You can share your
thoughts with us at markets.research@thomsonreuters.com
BOE: TAPERING TIME? (1122 GMT)
The UK economy is about to show a strong rebound with the
fastest vaccine campaign in Europe, and the time for tapering
might be about to come.
It's a close call on whether the BoE will pull the trigger
on tapering at the May meeting, but "our base case is that the
Monetary Policy Report (MPC) delays any QE taper to June,"
Deutsche Bank analysts say.
"This should give the committee confidence around the
recovery, alongside a 'string' of solid data from growth to
inflation before slowing the pace of asset purchases," they add.
No change is seen to the Bank's policy settings on 6 May
with the Policy Rate at 0.1% and QE target at GBP 895bn.
Deutsche Bank analysts expect the MPC to upgrade its 2021
GDP growth forecast closer to 7%, with output now expected to
cross its pre-pandemic GDP level by year-end.
They see BoE forecasts to show headline CPI "tracking close
to the Bank of England target in two to three years."
(Stefano Rebaudo)
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FURTHER CRACKS IN BITCOIN'S CRYPTO DOMINANCE (1100 GMT)
Bitcoin's 15% rebound since it hit a low of $47,000 on
Sunday is impressive but somehow, the king of crypto seems to
have lost some of its shine on the way.
There appears to be a few cracks across its once supreme
dominance of the crypto space and that's not only due to the
frenzy around dogecoin and its quirky Shiba Inu dog memes.
According to the latest data on https://coinmarketcap.com/charts/,
bitcoin's now only accounts for just 50% of the total market
capitalisation of crypto currencies, against about 70% at the
beginning of 2020.
Other evidence came from Coinshares Digital Asset Fund Flows
Weekly dated April 26 which noted "poor sentiment for bitcoin"
and "improving appetite for Ethereum".
Ethereum funds and investment products drew $34 million last
week, while bitcoin funds lost $21 million, its largest weekly
outflow on record.
Also showing the momentum behind the rising crypto currency
was the European Investment Bank raising on Wednesday 100
million euros from a two-year digital bond registered in the
public ethereum blockchain network.
Have a look at the past two weeks and there's something
looking like a trend:
EIB uses blockchain for new 100 mln-euro bond sale
(Julien Ponthus)
*****
EZ DATA: ECB HAS TO GET READY (1028 GMT)
Today’s eurozone macro numbers came in roughly in line with
expectations and has not yet affected equity or bond prices.
But they signal that the economy is ready to jump-start,
with the ECB doomed to convince markets the expected inflation
will be temporary.
“With inflation approaching 2%, once GDP growth jumps on the
back of reopenings, it will become key for the ECB to get the
message across that inflationary pressures look to be transitory
for now,” ING analysts say.
“Despite the decline (of euro zone GDP), underlying
developments were quite encouraging in the first quarter,” they
add, mentioning restriction easing effects on consumption and
declining unemployment confirmed by today’s data.
According to Unicredit, data on German GDP are “weak but
nearing the inflection point.”
Barclays sees a decisive rebound for German economy in Q3
2021 and pre-crisis levels in Q4.
The eurozone economy shrank in the first three months of the
year, preliminary data showed, while headline inflation picked
up as expected on a surge in energy prices.
The German economy contracted by a greater than expected
1.7% in Q1.
(Stefano Rebaudo)
*****
BUMPER Q1 FAILING TO IMPRESS: THE BARCLAYS EXAMPLE (0920
GMT)
If your first thought, when you saw Barclays shares falling
6% after profits more than doubled, was 'seriously?' then keep
on reading.
In the ocean of strong Q1 earnings, analysts are looking for
small cues that things may not be as pretty as they look.
And for Barclays, that's clearly the outlook.
"Barclays has spooked investors this morning after sounding
a note of caution on the outlook for the UK", was the take of
Adam Vettese at eToro.
As one can see from the flurry of comments, the words
'caution' or 'cautious' are not exactly what investors are
looking for!
Citi pointed to Barclays' "cautious cost outlook" while
Neil Wilson at Markets.com said "a drop in investment banking
earnings, lower revenues and a cautious outlook took the shine
off a doubling in profits."
Though the equities trading business heavily outperformed,
analysts highlighted the 35% drop in revenues from its fixed
income, currencies and commodities, which was largely linked to
tighter spreads and lower client activity.
It somehow makes sense in a way that analysts are taking a
deep look into Q1 results.
We are indeed clearly talking about a game of easy
comparisons with last year when the market collapsed, while
Europe lived its first COVID-19 lockdown.
"Q1 year-over-year numbers need to be put into context of a
weak comparative quarter last year as the pandemic started to
take hold," says Richard Saldanha, Portfolio Manager at Aviva
Investors.
As Russ Mould at AJ Bell explains, there's a bit of a case
of buying the recovery expectation early rather jumping on board
once the actual results are published.
"The market response also reinforces the idea that it is
better to travel than arrive with Barclays shares having
performed strongly since the start of the year ahead of the
results".
Anyhow, Barclays wasn't alone, BNP Paribas shares also fell
after the company reported bumper Q1 profits, but higher costs.
(Joice Alves and Julien Ponthus)
*****
NO U.S. RATE RISE UNTIL 2024? (0905 GMT)
A Fed tapering might be dangerous for equities, but we
should also ask ourselves if investors have already priced that
in.
UBS analysts have a pretty clear idea on the matter. They
expect “discussions on bond purchase tapering (by the Fed) to
surface in the second half of the year.”
But they “believe markets have largely priced in this
expectation.” In addition, they “do not expect any rate hike
until 2024.”
This would mean that equities will benefit from the
ultra-loose policy by the U.S. government, without worrying
about yields for a reasonable length of time.
But there are still reasons to expect more market turbulence
“as investors fret over rising inflation and the uneven global
progress in combating the pandemic,” UBS analysts say.
Bottom line, equities can rise further, but better to be
exposed to the “cyclical part of the market such as financials,
energy and value stocks.”
The chart shows the 10-year U.S. bond yields and the U.S.
dollar forward inflation-linked swap.
(Stefano Rebaudo)
*****
EARNINGS PROP UP STOXX, BUT BANKS UNDER PRESSURE (0745 GMT)
European stocks opened slightly higher as a batch of solid
company results boosted risk sentiment and offset worries about
rising bond yields.
The STOXX 600 index is up 0.2% with autos,
construction and materials stocks leading gains. Banks
are on the negative side, down 0.7% after yesterday’s
rise.
Barclays shares are down 5.5% after results.
Shares in AstraZeneca are rising 2.7% after the
company reports Q1 profit and sales ahead of expectations and
forecast higher sales in Q2.
Swiss Re stocks are up 4% after the company swang
to Q1 net profit, which was better than analysts expectations.
Investors will focus on today’s eurozone inflation figures
which might add more fuel to the fire of worries about rising
yields. Some analysts see upside risks, while most see a modest
decline in core numbers.
Eyes also on the U.S. core PCE Price Index with analysts
expecting a sizable jump.
(Stefano Rebaudo)
*****
EUROPE MAY OFFER STEER FOR WEEKEND CHEER (0658 GMT)
It's Europe's turn to confirm an improving global outlook,
a day after strong U.S. data and upbeat earnings lifted the S&P
500 to a record high close.
So far, so good: BNP Paribas, the euro zone's biggest listed
lender, posted a better-than-expected first-quarter profit while
Q1 profit at British bank Barclays more than doubled.
Next up is GDP data. Ahead of a euro-wide number released
later this morning, France revealed its economy grew a
stronger-than-expected 0.4% in Q1, having shrunk 1.4% in the
final quarter of 2020.
The euro zone economy is forecast to have shrunk 2% in the
first quarter year-on-year, versus a 4.9% fall in the final
quarter of last year.
A flash inflation estimate is also due; economists forecast
a 1.6% rise in the headline number in April versus a 1.3%
increase in March.
These figures may seem underwhelming compared to the United
States, which grew at a 6.4% annualized rate last quarter. Yet
sentiment appears to have turned a corner thanks to a pick-up in
the COVID vaccination rollout and signs economic activity has
held up relatively well in the face of ongoing restrictions.
That view perhaps is why Germany's 10-year Bund yield is
ending April almost 10 basis points higher -- even
as the U.S. equivalent is down 10 bps.
The recovery expectations, alongside upbeat earnings have
underpinned stocks, although Asian shares slipped on Friday and
European stock futures were a touch lower.
Copper, the other key growth barometer, also slipped after a
blistering rally to $10,000 a tonne, though it is on track for
the 12th monthly gain in the past 13 months.
Finally, the U.S. dollar skidded toward a fourth straight
weekly decline against a basket of peers, undermined by the
Federal Reserve's message of ultra-low rates for longer.
Key developments that should provide more direction to
markets on Friday:
- Earnings calendar: Exxon Mobil, Chevron, AbbVie, Charter
Communications, AstraZeneca.
-Nestle has bought the brands of vitamin and supplements
maker The Bountiful Company for $5.75 billion
-Darktrace lists in London but valuation well below reported
target
- U.S. March personal spending and income numbers due out.
- Credit Suisse board member Gottschling to exit after
Greensill, Archegos losses
- China official manufacturing PMI fell to 51.1 in April.
-British house prices posted the biggest single-month
increase since 2004
- Retailer Amazon posted record Q1 profits.
(Dhara Ranasinghe)
*****
EUROPE SUBDUED ON YIELDS RISE, CHINA WORRIES (0528 GMT)
European stock futures are slightly lower with no clear
trend emerging yet as a rise in yields is expected to put
pressure on some equity sectors while a mixed picture on Asian
markets dampens risk sentiment.
China stocks lost ground overnight after weak data on
concerns about a monetary policy tightening coupled with
Sino-U.S. tensions. U.S. President Joe Biden took aim at China
in his first speech to Congress, pledging to maintain a strong
U.S. military presence Indo-Pacific.
Biden's new spending plan and the dovish stance by the Fed
continue to support risk-appetite along with U.S. data released
yesterday, which showed American economic growth accelerated in
the first quarter.
(Stefano Rebaudo)
*****
