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LIVE MARKETS-ECB meeting: no changes expected but slower growth, trade war in focus
Thu, 26th Apr 2018 06:57
April 26 - Welcome to the home for real-time coverage of European equity markets brought to
you by Reuters stocks reporters and anchored today by Helen Reid. Reach her on Messenger to
share your thoughts on market moves: firstname.lastname@example.org
ECB MEETING: NO CHANGES EXPECTED BUT SLOWER GROWTH, TRADE WAR IN FOCUS (0557 GMT)
Analysts broadly expect no big news from today's ECB meeting in terms of changes to policy
or communication, but the Euro zone's weaker economic data, and the impact of a potential global
trade war, will be hot topics Draghi will surely be asked to comment on.
"ECB speakers have put on a brave face recently despite the weaker incoming data," write
Societe Generale analysts. The slower data makes it unlikely the ECB's June inflation forecasts
will be much improved from March.
But the main issue remains "how to anchor interest rate expectations," they add. A wildcard
option would be to express a view on the long-term equilibrium interest rate, but this would
come with communication risks.
On trade wars, the ECB should normally look through a tariff-induced rise in inflation, but
SocGen points out "in a scenario of limited resources and resilient economic activity, possibly
with rising oil prices on the back of geopolitical risks, the ECB would be concerned about the
impact on inflation expectations."
SocGen expects a decision in June/July to extend the asset purchase programme until December
at 15 billion euros per month, and rate hikes in June and September 2019, ending the negative
RESULTS TO WATCH TODAY (0547 GMT)
Earnings will drive the day in European trading. Roche, the world's biggest cancer
drugs maker, lifted its outlook after first-quarter sales topped analyst estimates.
In less optimistic results, Deutsche Bank announced cuts to bond and equities
trading, overhauling its troubled investment bank after reporting a 79 percent drop in net
profit in Q1.
German forklift maker Kion blamed slower growth for a lower-than-expected order
intake, while network equipment maker Nokia reported a sharp fall in profit as
telecom operators held off spending.
In other news, a judge placed French tycoon Vincent Bollore under formal investigation
yesterday evening over his port network in West Africa. He is suspected of corrupting foreign
public officials and complicity in corruption, his lawyer has said.
Shares in his company Groupe Bollore have fallen 8 percent since the open on
Tuesday, the day police began to question him.
And at 0600 GMT we'll have UK results coming in, with notably oil major Royal Dutch Shell
reporting. After such a run-up in oil stocks recently with crude surging higher, it'll
be interesting to see whether these results deliver, and how the shares react.
Here are some of today's main headlines:
Deutsche Bank announces major overhaul of investment bank
Roche lifts 2018 revenue outlook as new drug sales accelerate
Philips Lighting 1Q core earnings miss expectations
Kion Q1 order intake hit by slower growth, profit rises
Deutsche Boerse lays out growth plans under new boss
Nokia posts falling first quarter profits
Schindler's Q1 profit rises on strong Asia-Pacific growth
Safran says higher Q1 revenue bolsters full-year targets
France's AccorHotels in talks to buy Movenpick -Le Figaro
Spain's Sabadell Q1 net profit rises 33 pct on lower provisions
Covestro Q1 earnings up on higher prices for foam chemicals
French tycoon Bollore placed under formal investigation in Africa graft probe
MORNING CALL: EUROPEAN STOCKS TO RECOVER ON EARNINGS BOOST (0527 GMT)
Good morning and welcome to Live Markets. The main European benchmarks are called to open
higher today after a pretty hefty fall yesterday, as anxiety over bond yields dissipates
somewhat to be replaced by a focus on earnings.
Wall Street's robust earnings helped quell concerns over the U.S 10-year yield breaching 3
percent overnight, boosting the Dow and S&P 500 as well as Asian stocks, which bounced back from
three-week lows plumbed in the previous session.
Spreadbetters call the DAX 60 points higher at 12,482, the CAC 40 up 23 points at 5,436, and
the FTSE 100 9 points higher at 7,389.
(Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)