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EUROPEAN STOCKS PROPPED UP BY NOKIA, MINERS (0736 GMT)
European stocks are slightly lower ahead of U.S. data amid
worries about the Delta variant.
U.S. core inflation is due today and will likely have
significant implications for the success of the reflation trade
as an upside surprise in U.S. data might prompt the Fed to shift
in a hawkish direction.
But a sort of reflation trade seems still to be in action
with basic materials stock index among the winners up 0.6%.
The Stoxx 600 is down 0.1%.
The telecom stock index -- which includes Nokia
shares -- rises 0.5%, banks are up 0.2%.
Stocks in the telecom equipment maker are the best performer
in the Stoxx 600, up 6.2%, after the company said it planned to
raise its full-year outlook as business picked up pace in the
second quarter.
Shares in Dr Martens are up 5% after Goldman Sachs
raised its rating to ‘buy from ‘neutral’.
(Stefano Rebaudo)
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INFLATION SPOTTING (0709 GMT)
Markets are awaiting one of this year's most important U.S.
data releases-- inflation data for June. A yearly rise of 4.9%
is likely, according to pollsters, but after two months of
stronger-than-expected prints, risks may be to the upside.
Anything north of 5.5% might fuel a market selloff, analysts
reckon.
Investors will remember that following recent upside
surprises, the Fed pivoted hawkish at its June policy meeting.
But so far, market action doesn't reveal much unease -- MSCI's
global stock index scaled record highs earlier, while European
and U.S. stock futures are flat to firmer.
There was reassuring data from China with export growth
accelerating to 32.2% year-on-year. While import growth slowed,
it too exceeded expectations.
U.S. second-quarter earnings also kick off in earnest later
in the day, with JPMorgan and Goldman Sachs among the first to
report. Investors will watch for elevated margin pressures from
higher input costs though expectations are for S&P 500
companies' earnings per share to rise 66%, IBES data from
Refinitiv shows.
In corporate news, Swiss watchmaker Swatch returned to
profit in the first six months of 2021 and sales jumped more
than 50%, while Danish drugmaker Novo Nordisk will acquire U.S.
drug developer Prothena's heart therapy, PRX004, in a deal worth
up to $1.23 billion.
Finally, the renewed COVID-19 upsurge is in the background,
with France pledging tougher restrictions for people who didn’t
get vaccinated.
Day ahead:
-U.S June inflation data due at 1230 GMT.
-Bond auctions: U.S. 12-month and 30-year; Japan 20-year;
Germany 2-year
-Federal Reserve events: Atlanta Fed President Raphael
Bostic, Boston Fed President Eric Rosengren
-U.S. earnings: Pepsi, JP Morgan, Goldman
-European earnings: DNB, Nordic Semiconductor
-Bank of England has scrapped pandemic-era curbs on
dividends from HSBC, Barclays and other top lenders
-Alibaba Group and Chinese state-backed firms are exploring
bids for a stake in Unisplendour,, a cloud computing
infrastructure firm, for as much as $7.7 billion
(Saikat Chatterjee)
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EUROPE SLIGHTLY LOWER AHEAD OF U.S. DATA (0621 GMT)
European stock futures are slightly lower ahead of U.S. core
inflation data that might affect the Federal Reserve narrative
about the economic recovery.
Wall Street main indexes closing at new all-time highs are
propping-up stocks, while worries about the Delta variant
continue to weigh.
Yesterday U.S. Treasury bonds saw solid demand, and bond
yields edged lower, suggesting markets are not overly concerned
about a possible upside surprise from U.S. data.
Equities have been circling in a holding pattern before
today’s numbers, which according to economists polled by
Reuters, are expected to show a year-on-year increase of 4%.
(Stefano Rebaudo)
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