Last checked at 
WHAT IF LE PEN WINS? (1011 GMT)
Markets have been pretty quiet during the first round of the French presidential elections as investors seem convinced that Emmanuel Macron would win the runoff vote on Sunday.
But what if far-right challenger Marine Le Pen wins?
UBS analysts believe that if Le Pen were to become president, her ability to deliver more fiscally expansive domestic policy would be severely constrained by the need to get public finances under control.
"EU policy will be the key concern, which could see peripheral spreads widen along with the French sovereign," UBS analysts say in a research note, mentioning a potential more precarious fiscal outlook for France.
They also expect Le Pen to advocate less European integration than current French leader Macron.
"We could even see the euro come under further pressure in the near term," they add.
"The election risk could even explain some of the underperformance of the CAC40 and the euro in recent sessions," they argue. "Thus, a Macron victory could see a modest bounce for French assets and the single currency."
(Stefano Rebaudo)
WHO SAID INFLATION WOULD HURT TELCOS? (0912 GMT)
J.P.Morgan points out how going into 2022 many had feared that telecoms stocks would perform poorly in the face of rising interest rates and inflation pressures, given the sector's high leverage and lack of pricing power.
Truth is that Europe's telecom index has gained more than 4% year-to-date, clocking a 10 point outperformance versus the STOXX 600 and making it the third best sectoral performer after oil and basic resources.
With that in mind, the U.S. bank screened for exposures to soaring energy costs, wage inflation, consumer spending pressure, rising interest rates, FX moves and Russian exposure.
They conclude that while from a macro perspective the sector is relatively defensive, the best positioned stocks in the current environment are KPN, towers companies, Elisa and BT.
(Danilo Masoni)
STOXX UP, MINERS DRAG, NESTLE SHOWS "PRICING POWER DOES EXIST" (0755 GMT)
It's a slightly positive start this morning for European equity markets with comfort deriving from positive earning news on both sides of the Atlantic more than offsetting concerns that COVID-19 lockdowns in China could slow down the world's No.2 economy.
China plays, like mining stocks, are under pressure, dragging the commodity heavy FTSE 100 index just below parity in early deals but elsewhere the earnings cheer prevailed, helping the STOXX 600 up 0.2%.
Heavyweight Nestle provided the biggest single uplift to the pan-European benchmark, rising 1.4% after the Swiss-listed food group posted strong results which Bernstein said show "pricing power does exist."
Airline stocks were boosted after U.S. peer United Airlines predicted record revenue in Q2, sending its shares up 8% in extended trading.
European tech was flat, even as Tesla's strong numbers helped Nasdaq futures recover part of yesterday's losses in the wake of Netflix's surprise subscriber loss.
(Danilo Masoni)
OF LANDINGS HARD AND SOFT (0714 GMT)
The ink is barely dry on global growth forecast downgrades from the World Bank and International Monetary Fund, but banks are rushing out their own gloomy assessments.
"Prepare for a hard landing," Deutsche Bank shrilled in a Wednesday report. Flagging the possibility of a Fed funds rate in the 4.5-5% range and euro zone rates at 2-2.5%, Deutsche chief economist David Folkerts-Landau said a late-2023 U.S. recession was now a baseline scenario.
Goldman Sachs, meanwhile, warns the Fed faces "a hard path to a soft landing".
The forward indicators in Friday's PMI data may signal how bad purchasing managers expect things to get. In the meantime, watch bond markets, which JPMorgan predicts will react if softening economic growth prices out some rate hikes.
Treasury 10-year yields slumped 11 basis points on Wednesday, while the 2-year/10-year yield curve -- that well-known recession indicator -- has flattened back to around 25 bps.
Some of that fall is being reversed on Thursday, but equity markets are higher -- in fact, Nasdaq futures are up half a percent following robust earnings from Tesla.
In fact, the earnings season is chugging along nicely, which made the Netflix report such a shocker -- declining subscriber numbers sent shares almost 40% lower on Wednesday, rippling out across the entire streaming sector, from Disney to Spotify.
In the euro zone, consumer confidence readings dived further in April, readings show on Thursday.
Central banks are, for now, showing little inclination to dial back rate hike expectations; the normally dovish San Francisco Fed chief Mary Daly said the case for a 50 bps May rate hike was "complete".
The big three of the central banking world - Bank of England Governor Andrew Bailey, ECB President Christine Lagarde and Fed chairman Jerome Powell -- speak on an IMF panel on Thursday. Their view on the growth/inflation trade-off will be closely monitored.
Key developments that should provide more direction to markets on Thursday:
-Eurozone final March HICP; flash consumer confidence
-Russian central bank head Elvira Nabiullina addresses Duma
-U.S. initial jobless claims/Philadelphia Fed business index
-U.S. TIPS auction
-European earnings: Nestle confirms margin and sales growth targets for 2022; ABB posts 'promising' start to 2022 with big jump in orders; Anglo American cuts production guidance after 10% Q1 drop
-U.S. earnings: Dow Chemicals, Philip Morris, AT&T, Blackstone, Alaska Air, American Airlines
(Sujata Rao)
EUROPE SET TO EXTEND BOUNCE AS EARNINGS FLOW IN (0639 GMT)
European shares are expected to extend their bounce this morning, supported by a flow of solid earnings news, and after yields pulled back from multi-year highs ahead of comments from Fed Chair Powell and ECB's Lagarde in Washington later today.
Futures on the EuroStoxx50, DAX and FTSE indices rose around 0.3%, while U.S. derivatives pointed to a recovery for the tech-heavy Nasdaq as positive earnings from Tesla helped soothe nerves following the surprise decline in Netflix subscribers.
Over in Europe, Nestle confirmed its margin and sales growth targets for 2022 after strong price increases to cushion cost inflation helped organic sales at the food group rise more than expected in the first quarter.
Engineering company ABB, paints and coatings maker Akzo Nobel and vouchers provider Edenred also posted good-looking updates, sending their shares up in pre-market trade.
(Danilo Masoni)
