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German industrial production rises more than expected
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STOXX 600 up 0.5% ahead of long Easter weekend
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Tui shares surge
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Europe's real estate sector up more than 2%
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LUXURY MARKET: WHAT ARE CHINESE BUYERS PURCHASING? (1202 GMT)
Barclays has joined forces with Vogue to survey the fashion magazine's readers in China - a key market for European luxury brands - and get a sense of what they are buying.
"The Vogue reader is young, female and relatively well-of," Barclays says, and a cohort "more likely to be trendsetters" and hence market moving for luxury stocks like LVMH and Gucci's owner Kering.
Asked about their past purchases, Vogue readers in China named Chanel, Dior and Saint Laurent as the most acquired brands so far this year.
Chanel, Dior and Gucci are on top of purchase intentions for the second quarter of the year.
When it comes to jewellery, this year they bought more LVMH-owned Tiffany than Cartier and Bulgari, also owned by LVMH.
Barclays has an overweight rating on LVMH, Hermes, Moncler, Prada and Richemont.
"On LVMH, the survey confirms our view that the key brands of the group remain well positioned. More interestingly, the survey challenges our view on Kering. As a reminder, we cut Kering to EW last year as the core brand Gucci was losing market share in China due to brand fatigue", it says.
The quarterly survey analyses the spending trends of around 500 China-based Vogue readers. Here are the main findings:
EUROPEAN BANKS TO WEATHER Q1 EARNINGS STORM BETTER THAN U.S. PEERS (1130 GMT)
While fears about contagion from the banking crisis in March seem to have dissipated, investors are growing concerned about how the upcoming earnings season will bode for the battered banking shares on both sides of the Atlantic.
European banks have bounced this week after a 15% plunge in March when they recorded their worst monthly showing since March 2020.
U.S. banks, meanwhile, have made just modest gains since hitting an over two-year low last month. In an evidence of growing nervousness, an index of U.S. regional banks closed at a near two-and-half year low on Wednesday.
It's becoming clear that investors see the relatively cheaper European banks showing more resilience than their U.S. peers, that are likely to be hit by deposit outflows and potentially tighter regulation.
"European banks are overall more resilient to both deposit flight as well as commercial real estate exposure versus the U.S. regional banks. We think the earnings momentum will continue and valuations have room to recover from still low levels," said Mathieu Racheter, head equity strategy research of Julius Baer.
As per Refinitiv estimates, earnings for financial companies on Europe's STOXX 600 are seen rising 37.3% in the first quarter compared with a year ago, while analysts see a 5.2% growth in profits for S&P 500 financial companies.
"You're seeing potential for capital return stories to remain fairly resilient in Europe," said Jamie Mills O'Brien, investment director at Abrdn. "The European banking system is far better capitalised and has far more diverse deposit base."
O'Brien added that we could see a confirmation of higher deposit outflows, lower capital returns and potentially more regulation weighing on U.S. bank earnings in the near term.
(Sruthi Shankar)
GOOD OR BAD FRIDAY FOR PAYROLLS? (1118 GMT)
Monthly U.S. employment data is always a nerve-wracking affair. But this time around, with non-farm payrolls landing on a public holiday in most of the world, and not to mention the myriad of moving parts that analysts must plug into their forecasting models right now, there's a high chance the figures could wreak havoc on the markets that are up and running.
Liquidity is frequently thin on NFP day anyway, as no one likes to be caught off guard by a surprise number. But with really just U.S. bond markets and index futures up and running, it's going to be even tougher to trade...or is it?
RBC Capital Markets strategist Adam Cole has taken a look at market reaction on the eight occasions going back to April 1994 when NFPs have landed on Good Friday.
Dollar/yen has the most consistent relationship with U.S. data surprises, regardless of what rate expectations are or whether the environment is risk-on or risk-off, he says.
Cole says recent experience shows the reaction to surprises in the data has been both "rapid and normal."
In seven out of the last eight occasions, dollar/yen has risen with an upside surprise, as traders have bought the U.S. currency and vice versa with a downside surprise.
And there is no evidence that the market reaction extends in to the following Monday," he adds.
U.S. JOBLESS CLAIMS: EXPECT THE UNEXPECTED (1036 GMT)
It's starting to look more and more likely that the United States could slip into a recession, the odds of which have been rapidly sped up by the mini-banking crisis and recent data all pointing to the Federal Reserve's tightening cycle taking a toll. The main focus for the week lies squarely on labor market indicators.
A report on Thursday is expected to show weekly jobless claims rose to 200k in the week ending April 1, from the prior week's 198k but economists at Goldman Sachs said, "don't be surprised if initial jobless claims jump."
Taking into account the distortions in seasonal factors, GS says initial claims could jump to over 240k, warning there could be a large but illusory increase in reported initial claims over the next few months.
GS notes that rather than reflecting genuine changes in the pace of layoffs, these figures have instead shown distortions to the seasonal adjustment factors caused by extreme volatility during the pandemic over the last year.
And if the problem is not corrected in this reading of jobless claims, then GS expects to see a much more modest increase roughly in the 200k to 210k range.
But jobless claims would be the tip of the iceberg that is the monthly reading of the U.S. Labor Department's non-farm payrolls data.
Expectations are for a rise of of 239k in March down from February's 311k increase, while the unemployment rate is expected to remain unchanged at 3.6%. The release lands on Friday, when U.S. stock markets, and most markets around the world, are shut for Good Friday.
"The fact that the U.S. jobs data – which is the most watched data point in the entire world - is scheduled on Good Friday is disquieting," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
"For those markets that will still be up and running, the trading volumes will be thin, therefore the price action posterior to the data will likely be exacerbated by the lack of volumes."
STOXX RISES ON GERMAN INDUSTRIAL PRODUCTION JUMP (0828 GMT)
European shares are on the rise, ahead of a long Easter weekend break, as data showing German industrial production rose significantly more than expected offset fears of a recession in the United States, the world's biggest economy, following weak economic data this week.
German industrial production rose 2% in February, due in part to a rise in vehicle manufacturing. In a Reuters poll, analysts had pointed to a increase of only 0.1%.
The STOXX 600 rose 0.5%, with real estate index, long battered by rising interest rates, rising 1.5%. Risk sensitive travel stocks are up 1.4%, while miners and oil & gas are each up around 1%.
(Joice Alves)
WEARY MARKETS WARY OF RECESSION (0652 GMT)
Another set of weaker-than-expected U.S. economic data has investors spooked at the prospect of a looming recession, crimping risk appetite as traders hunker down and wait for the always-important non-farm payrolls data on Friday.
Asian stocks sagged, while the dollar was on the front foot as investors kept their risk-off hat ahead of the long weekend. Oil prices eased after the shock at the start of the week from OPEC+ to cut production.
Futures hint at a muted open in Europe, with the pan-European STOXX 600 index aiming to break its losing streak this week. European equities had a stellar start to the year but the March madness due to the banking turmoil has weighed.
The string of weak U.S. economic data this week has emboldened bets that the Fed may just be ready to pause its tightening policy, with markets still pricing more than 50% chance of the central bank standing pat when it next meets in May.
Data from China served as a bit of a bright spot, with March services activity in the country revving up at the quickest pace in 2-1/2 years on robust new orders and job creation and a consumption-led post-COVID recovery.
There are concerns though that the recovery in China may not last long in the face of geopolitical tensions as well as financial worries outside the country.
Meanwhile, UBS executives sought to assure investors on Wednesday that Switzerland's largest bank can make its shotgun takeover of Swiss rival Credit Suisse work.
In corporate news, FedEx will consolidate its separate delivery companies into a single entity as it looks to cut costs and better compete with United Parcel Service and Amazon.
Canada's TD Bank Group is the most shorted banking stock globally, data provider ORTEX's calculations showed, with hedge fund bets against the company at $4.2 billion. Analysts are concerned about the bank's exposure to U.S. regional lenders.
Key developments that could influence markets on Thursday:
Economic events: UK all sector PMI for March; S&P Global Cons PMI for the Eurozone, Germany and France; UK Halifax house prices for March
(Ankur Banerjee)
EUROPEAN FUTURES FLAT AS INVESTORS WEIGH U.S. DATA (0648 GMT)
European futures are about flat as investors weighed how pivotal U.S. jobs data coming out on a stock trading holiday would impact Federal Reserve policy, after a raft of sluggish economic data this week.
The closely watched U.S. non-farm payrolls report on Friday, when many markets globally are closed, will follow disappointing services sector data from the Institute for Supply Management (ISM) and private employment figures on Wednesday, as well as a slump in U.S. March manufacturing activity at the start of the week.
Globally, equity investors were inclined to take money off the table after recent strong gains and with many global markets heading into a holiday for Good Friday.
(Joice Alves)
