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* European shares rising on China's surprise data
* BoE leaves policy unchanged
* Retailers top gainers
* Zalando hits record highs
Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters. You can share your thoughts with Thyagaraju Adinarayan
(thyagaraju.adinarayan@thomsonreuters.com), Joice Alves (joice.alves@thomsonreuters.com) and
Julien Ponthus (julien.ponthus@thomsonreuters.com) in London and Stefano Rebaudo
(stefano.rebaudo@thomsonreuters.com) in Milan.
NORGES BANK UNLIKELY TO JOIN THE SUB-ZERO CLUB (1220 GMT)
The BoE is not the only central bank which seems reluctant to join the sub-zero club!
While Norway's Norges Bank surprised markets by cutting its key interest rate to zero from
0.25%, it might very well be ready to stop just there.
"Governor Olsen has hinted that this is as far as policymakers are likely to go," ING
analysts say.
It was Norges Bank's third rate cut in less than two months, which reduced the cost of
borrowing from 1.5%.
Even if the oil price crash was a further economic blow for Norway, today's move was
"surprising" as having already cut interest rates in March, "the Norges Bank looked like it was
pretty much done with its stimulus package," ING says.
(Joice Alves)
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BoE: NOT GOING BELOW ZERO (1040 GMT)
The Bank of England has left its interest rates unchanged today and has decided to wait
until it has more clarity on the lockdown measures before deciding if it needs to adjust its 645
billion pound bond-buying programme, all as expected.
And investors were ok with that as "the general view was there still more to go with the
current bond buying (programme) they didn't really need to increase it," says Nick Brooks, head
of economic and investment research at Intermediate Capital Group.
But BoE will likely increase the bond buying programme in June as it will be nearing full
use of the current package by then, he adds.
"I think at this point, there's no indication that they plan to move to negative rates," he
says. "The focus will be on increasing the package going forward."
Meanwhile the forecast of a strong recovery next year seems too "optimistic", Brooks says.
"It's likely that we will see a second wave of infection here in the UK based on what we're
seeing in countries that are ahead of us in Asia".
Therefore, "there's going to be a need to periodically push on the brakes and put some forms
of containment policies in place when we see increases in cases," he adds.
(Joice Alves)
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MONEY MARKET INVESTORS, DON'T FORGET TO LOOK AT STOCKS! (1000 GMT)
Money market funds skyrocketed recently, even more than during the financial crisis, but
sitting on cash might not be the best strategy, despite many unresolved coronavirus risks.
There is a lot of uncertainty around: Investors worry about Donald Trump's rhetoric on the
pandemic, which is putting further selling pressure on stocks. Yet, the big question is always
about when the COVID-19 crisis will be over and whether the world will be hit by a second wave
of infections.
Meantime, today's much stronger than expected numbers on Chinese exports are lifting
sentiment.
In any case, according to the UBS House View, waiting for "absolute clarity before deploying
cash can leave you on the sidelines for a prolonged period."
The investment bank suggests investing into riskier, higher-yielding assets such as
lower-quality credit or stocks.
"A selective approach in equity may help sidestep some risks," with opportunities in
cyclicals, staple and defensives stocks, UBS adds.
Investors have poured money into MMFs recently. UBS cites U.S. data from Investment Company
Institute showing that they have grown to around $4.7 trillion in eight weeks, leaping by more
than one trillion. During the global financial crisis, MMFs grew by less than half a trillion
dollars.
(Stefano Rebaudo)
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OPENING SNAPSHOT: ZALANDO JUMPS, BT FALLS (0730 GMT)
European bourses are trading in positive territory following a surprise rise in China's
exports and a mixed batch of earning reports.
The pan European index is up 0.5% with the retail sector boosted by a surge in Zalando
. The German online fashion retailer's shares hit record highs after it forecast 10-20%
jump in 2020 sales.
Meanwhile, BT Group shares are falling 5.3% after company suspended dividends.
Britain's blue chips are trading 0.4% higher after the BoE earlier this morning said
it was ready to take action to counter the coronavirus hit to the economy. As expected, it held
off from launching further stimulus measures.
(Joice Alves)
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ON THE RADAR: TELCO M&A AND AIRLINES (0650 GMT)
Futures are pointing to a slightly positive open for European stocks as earnings season
continues to paint a mixed picture.
The biggest news of the day however was the big telco M&A: Telefonica - which just
withdrew 2020 guidance - will merge its British unit O2 with Virgin Media, owned by Liberty
Global, creating a giant in the British telecoms space with O2 valued at 12.7 billion
pounds and Virgin Media, at 18.7 billion pounds, including debt.
Coming back to results and dividends, BT is the latest UK biggie to suspend its
dividend until 2021/22. The telco's shares are seen falling 5% after it pulled financial outlook
and suspended dividend, according to traders.
HeidelbergCement slashed its dividend proposal as part of a 1 billion euro ($1.1
billion) cost-cutting move. Equinor suspended its 2020 oil and gas output guidance.
As global corporates run to identify ways to contain the spread of COVID-19, Eurofins
said it will launch a product to detect coronavirus.
It is also a busy Thursday for corporate earnings with the usual batch of catastrophic
COVID-19 falls: Norwegian Air's passenger volume fell by 98.7% in April y-o-y, Munich
Re Q1 profit falls 65%,
In the airlines space, British Airways-owner IAG said flights could return to
service in July and it has 10 billion euros of liquidity available.
Other revenues drops were more modest: Osram said revenues decreased by 4.7% to
821 million euros.
Italy's Enel suffered no significant impact from the coronavirus. ArcelorMittal and
Anheuser-Busch InBev expect sharp hit to earnings in the second quarter.
(Joice Alves)
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MORNING CALL: BOE IN FOCUS (0539 GMT)
After yesterday's choppy session, European futures are trading in the black this morning as
unexpected positive exports data from China helps sentiment and Bank of England is set to
announce its latest monetary policy in the next 20 minutes or so.
Chinese exports proved far stronger than even bulls had imagined, rising 3.5% in April on a
year earlier, completely confounding expectations for a sharp fall.
Meantime, at 6 am GMT BoE will announce its monetary policy decision.
"With interest rates already at record lows of 0.1%, the only way the central bank can
effectively ease further is to widen the amount and scope of its bond buying program," says
Michael Hewson, Chief Market Analyst at CMC Markets UK.
(Joice Alves)
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(Reporting by Joice Alves, Stefano Rebaudo, Julien Ponthus and Thyagaraju Adinarayan)
