Live Markets: Rate angst keeps STOXX down

LEG Immobilien SE

09/03/2023 09:36

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      STOXX 600 down 0.5%
    

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      Rate hike worries linger
    

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      Real estate, miners lead fallers
    

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      U.S. stock futures inch lower
    

  
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        RATE ANGST KEEPS STOXX DOWN (0932 GMT)
    The downbeat global mood is spilling over to Europe in early
trading on Thursday with the STOXX 600  .STOXX  falling 0.5% as
uncertainty over the size of the next interest rate hike in the
United States continues to grip investors.
    Most sectors were down, led by rate-sensitive real estate
 .SX86P  after Germany's LEG Immobilien  LEGn.DE  suspended its
dividend, citing high rates and uncertainty over the value of
its real estate portfolio. Miners  .SXPP  were also big fallers
as copper prices declined.
    Insurers  .SXIP  bucked the weak trend, underpinned by gains
in Aviva  AV.L  after the company, under pressure from activist
investor Cevian, hiked payouts for investors. Aerospace and
defence  .SXPARO  was also in demand with BAE  BAES.L  rising to
a new record peak on optimism over submarine deals within the
AUKUS security pact between Australia, the UK and the U.S..    
    Around 82% of the STOXX was trading in the red.
    (Danilo Masoni)
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        (Danilo Masoni)
  
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        EUROPE SET FOR SOFTER START (0729 GMT)
    European shares were expected to open a touch lower on
Thursday as investors continue to ponder the outlook for rates
following remarks by Fed Chair Jerome Powell and ahead of the
closely watched U.S. jobs market report on Friday.
    EuroSTOXX50 and FTSE futures were both down around 0.3%,
with an eye also on earnings releases that continue to trickle
in as the Q4 season draws closer to an end. 
     Deutsche Post raised its dividend after a record 2022, but
flagged a challenging year ahead, while fashion house Hugo Boss
forecast 2023 sales to grow at a mid-single-digit percentage
rate, slower than last year.
    In the UK, Harbour Energy announced a new 200-million share
buyback, as higher oil prices helped the British North Sea's
biggest oil and gas producer treble its cash flow.
    Insurer Aviva, under pressure from activist investor Cevian
Capital to increase returns, unveiled a 300-million pound
buyback after its operating profit rose.
    Eyes are also on Credit Suisse. The Swiss bank has delayed
the publication of its annual report after the U.S. SEC raised
questions about its earlier financial statements, in the latest
blow for the company.
        
        (Danilo Masoni)
  
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    IS CHINA EXPORTING DEFLATION? (0651 GMT)
    Factory-gate prices stopped falling in China last month, but
did not rise and in annual terms remain negative - a welcome
piece of news on Thursday for Western central bankers who are
starting to run into difficulty in heading off sticky inflation.
    Relief wasn't immediate, as the figures were tinged by 
doubt on the robustness of China's consumption rebound, with
inflation in the country also at its slowest in a year.
    But with several months' data now published since the end of
China's restrictive zero-COVID-19 stance, there's some weight
behind analysts' contention that the reopening of the world's
second-biggest economy won't set off a new inflationary pulse.
    Unemployment and the lack of stimulus handouts are widely
expected to keep the temperature of local demand in check, while
a global slowdown is also likely to cool price pressure on
exports.
    That's likely welcomed since analysts are making their
latest upward revisions to U.S. and European interest rate
expectations and do not need another inflationary shock from
China's reopening.
    European futures  STXEc1  steadied in Asia as markets
assumed a holding pattern with the focus on U.S. data as the
driver of interest rate movement.
    As some of the dust settles on U.S. Federal Reserve Chairman
Jerome Powell's hawkish testimony at Congress, Fed funds futures
 0#FF:  steadied, perhaps a signal economists - who have been
jacking interest rate forecasts toward a peak near 5.75% or 6% -
may finally have done enough.  FEDWATCH     
    U.S. jobless claims data later on Thursday offers an entree
for a blockbuster jobs report on Friday that could make or break
market pricing for a 50-basis-point Fed hike later in March.
    The Bank of Japan concludes a two-day meeting on Friday,
though it is increasingly dancing to its own beat.
    A falling yen is among signs that efforts to deter
short-sellers in the bond market are working and speculation for
a policy shift at what will be Governor Haruhiko Kuroda's final
meeting in charge seems to have ebbed from earlier fever-pitch
levels.    
    MSCI's broadest index of Asia-Pacific shares outside Japan
fell 0.3%; Japanese stocks rose 0.6% on Thursday. 
    
    Key developments that could influence markets on Thursday: 
    Economics: U.S. jobless claims
    Speakers: Riksbank officials AinoBunge and Per Jansson, Bank
of England's Sarah Breeden, Bank of Canada's Carolyn Rogers
    
    (Tom Westbrook)
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
The race to raise rates    https://tmsnrt.rs/3yfEs90
Eu open    https://tmsnrt.rs/41ZbHLx
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