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THE YEAR OF THE FOOTSIE? (0955 GMT)
After three consecutive years of underperformance, London's FTSE 100 finally seems set to take on its European peers this year.
Boosted by rising oil and commodity prices, London blue chip stocks are up about 0.8% this year while key benchmarks in Paris, Frankfurt and Milan are down 7.4%, 9.3% and 10.9% respectively.
"This resilient performance has helped to put the UK back on the map for overseas investors looking to diversify their holdings," AJ Bell investment director Russ Mould argued in a morning note.
As a reminder, the pan-European STOXX 600 turned out a better investment in 2019, 2020 and 2021 (+23%, -4%, +22%) than the FTSE 100 (+12%, -14%, +14%).
But as you can see below, the trend since the beginning of the year is quite promising for British blue chip investors:
(Julien Ponthus)
OIL STOCKS SHINE IN CHOPPY TRADING (0825 GMT)
The STOXX 600 is broadly flat at the open with rising oil prices boosting oil and gas stocks.
The sector is up 1.2% and leading the pan-European index along with miners.
London's FTSE 100 is, as one could expect with its overweight on these sectors, benefiting for the trend and gaining 0.3%.
Nokian Tyres, which has been a clear loser from Russia's invasion of Ukraine, is the worst performing stock, down about 6%.
Tech as a sector is also under pressure, losing 0.7% with Prosus down 4.2%.
(Julien Ponthus)
OIL PRICES FUEL THE TIGHTENING DILEMMA FURTHER (0755 GMT)
There's arguably little central banks can do to tame surging energy and commodity prices other than try to limit second-round effects as they are being absorbed by the economy.
With oil prices jumping over $3 this morning and Brent above $110 a barrel, investors will be keen to hear later on today from Federal Reserve Chair Jerome Powell and European Central Bank President Christine Lagarde how monetary policy can adjust without rocking the boat of the recovery.
Strategists are indeed keeping a close eye on the spread between yields between of U.S. two-year and 10-year notes , fearing an inversion of that part of the curve could signal an impending recession.
In Germany, producers prices (PPI) show another 1.4% rise on the month, though slightly less than expected, giving another update about how the euro zone's biggest economy is coping after investor sentiment suffered a record slide in March with collapsing expectations making a recession, a scenario that can no longer be totally dismissed.
Fuelling the latest spike in crude prices is the European Union governments considering whether to impose an oil embargo on Russia over its invasion of Ukraine.
Such a decision, even with public opinion overwhelmingly on the side of Ukraine, could cost EU leaders dearly politically.
Euro zone consumers are getting a taste of what two euros per litre of gasoline tastes and France's Emmanuel Macron, seeking reelection next month, knows only too well that the "yellow vest" street rebellion was born out of a backlash against higher fuel prices.
Wheat prices also are at levels seen during the 2007/2008 food crisis, widely regarded as a key factor in the Arab Spring uprisings in the Middle East.
So far, the early monetary tightening cycle has been well received and the Fed's first hike saw U.S. and European stock markets experience their best week since November 2020, when the COVID-19 vaccine breakthrough lifted global markets.
European futures are broadly flat ahead of cash trading this morning after MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.7%.
With markets already on hedge, traders will be keen to discover why shares of embattled property developer China Evergrande Group have been suspended pending an announcement by the company.
Meanwhile investors in Russia will closely watch domestic sovereign bonds resuming trading today after a month-long suspension in the wake of Moscow's invasion of Ukraine.
Key developments that should provide more direction to markets on Monday:
-Russia allows some more financial market operations over next two weeks -China keeps benchmark lending rates unchanged, as expected [nAZN02ALI3) -Asking prices for UK houses see biggest March rise since 2004 -Speech by ECB President Christine Lagarde -Fed speakers: Chairman Jerome Powell, Atlanta Fed President Raphael Bostic