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STOXX Europe 600 down 0.2%
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ECB rate decision at 1215 GMT
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Fed leaves rates unchanged
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U.S. stock futures dip
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LUXURY: BUYING OPPORTUNITY BEFORE Q2 SEASON? (0940 GMT)
Do you remember Big Luxury's mini-crash last month on worries over a slowdown in the U.S.?
Well, the sector hasn't fully recovered from the hit back then and for BofA, this is a buying opportunity, given expectations of a strong second-quarter earnings season.
"Historically, pullbacks in the sector have been buying opportunities and this time will likely be no different," writes the U.S. investment bank in a note to clients.
"Positioning has become cleaner as top-down investors have sold the stocks on rhetoric around slowing U.S. demand, as well as China re-opening being 'underwhelming'. However, U.S. luxury spend is not worse than we expected, whilst luxury demand in China continues to outperform other consumer," it adds.
BofA expects upcoming quarterly numbers will ease concerns over cyclicality and drive outperformance in their shares.
"With >75% of growth in 1Q23 driven by Europe, Japan and Rest of Asia where data is accelerating, we believe the sector will continue to beat & upgrade," it says.
Top BofA picks are LVMH, Richemont and Hermes.
(Danilo Masoni)
VOLATILITY DEAD, STOXX INCHES LOWER (0827 GMT)
European shares dipped on Thursday, weighed down by profit taking across the mining sector, although muted moves elsewhere meant many indices remained not too distant from recent highs.
The stand-out mover was the euro STOXX volatility index which continued to fall in another apparent sign of investor calm, tumbling below 13 points for the first time since February 2020. The STOXX Europe 600 was down 0.2%.
Here's your opening snapshot:
EUROPEAN STOCK FUTURES DIP (0639 GMT)
European shares looked set to open a touch lower on Thursday after the Fed delivered what many described as a "hawkish pause" in its 17-month-old tightening cycle and ahead of another likely 25-basis point hike by ECB policymakers later on.
EuroSTOXX50 and FTSE futures both fell around 0.4% following a mixed close on Wall Street on Wednesday and slight overnight gains in Asia, as data out of China underwhelmed again, firming up the case for more stimulus.
China's central bank cut the borrowing cost of its medium-term policy loans for the first time in 10 months, in another sign Beijing is concerned about the economy's fragility.
EuroSTOXX bank futures meanwhile fell 0.3%, broadly in line with broader market weakness.
Even though central banks remained squarely in focus - the ECB decision is due at 1215 GMT followed by President Lagarde's news conference - there was some dealmaking activity that could liven up the European session.
Bain Capital made a $3.2 billion offer for software management company SoftwareOne. Reuters reported aerospace engine maker Safran <SAF.PA is nearing a deal to acquire a Raytheon Technologies Corp unit.
In the oil sector, Shell said it will not do any big M&A in the next couple of years. Still in the UK, events organiser Informa raised its annual profit outlook, helped by robust performance across its businesses.
Upbeat message also from fashion house Hugo Boss which raised its 2025 sales target, betting on strong demand across its markets, while H&M slightly lagged expectations for March-May sales as unusually chilly weather held back demand.
(Danilo Masoni)
THE ECB WON'T THROW A CURVE BALL (0558 GMT)
After a slight jolt overnight from the hawkishness surrounding the Fed's pause, investors can afford to be relaxed ahead of the European Central Bank's policy decision later on Thursday.
It's a given the ECB will deliver its eighth straight rate hike of 25 bps, and confirm that the pace of quantitative tightening will pick up.
They might hike again in July and September, is the broad view, putting the inflation battle ahead of the growth slowdown.
Macro forecasts are also due but are unlikely to change ECB President Christine Lagarde's determination and view that "there is no clear evidence that underlying inflation has peaked".
Never say never, but ING believes markets are "priced to perfection" for the ECB, with at least two rate rises, including Thursday's, in the price.
The Fed left its benchmark funds rate window at 5-5.25%, and chair Jerome Powell said the U.S. central bank needed to gather more information about the economy to determine what to do next.
The Fed's dot plot projected two more 25 basis point hikes this year, causing markets to push short-term U.S. yields higher and close out bets on any cuts in 2023.
In Asia, Japan's stock market continued to scale fresh 33-year highs, while China's economy continued to underwhelm. Data on industrial output and retail sales fell short of market forecasts, in the latest sign the economic recovery isn't living up to hopes.
China cut a key benchmark, its medium-term loan rate, by 10 bps and the yuan hit a six-month low of 7.1783 per dollar.
Later in the day, Turkey presents May central government budget data, bringing the focus back to its twin deficits, its plunging lira and how aggressively newly appointed Governor Hafize Gaye Erkan will hike rates on June 22 to tame skyrocketing inflation.
Key developments that could influence markets on Thursday:
Euro group finance ministers meet in Brussels
Eurozone trade data, ECB rate decision at 1215 GMT, Bank of England's Jon Cunliffe speaks
Turkey May central government budget data
(Vidya Ranganathan)
