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STOXX 600 up 0.3%
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Eyes on U.S. inflation data
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Volvo rallies on record profit
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U.S. stock futures inch up
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CAC NUDGES UP TO NEW RECORD PEAK (0810 GMT) Equities in Europe got off to a cautiously positive start on Wednesday and that was enough to nudge the CAC 40 up to a fresh intraday record high for the second day in a row. The French benchmark index was last up 0.5% while the region-wide STOXX 600 added 0.3%. The broader picture across country indices was mixed though. Behind the CAC 40's ascension to fresh peaks this year are double-digit gains in luxury heavyweight LVMH , which reports Q1 sales after the market closes. Its shares are up 24% YTD. Also contributing are other fashion plays L'Oreal Hermes , along with chipmaker STMicro and automotive company Stellantis ; up 24-38% in 2023.
Top gainer on the STOXX this morning was truck maker Volvo , up 8% after posting a record profit for Q1.
(Danilo Masoni)
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EUROPE SET FOR MUTED START (0633 GMT) European shares were expected to open broadly unchanged on Wednesday as investors treaded carefully ahead of the U.S. inflation report for March that will be key for the Federal Reserve's policy decision next month. EuroSTOXX50 and FTSE futures were last down 0.2% and 0.1%, respectively, following weakness in Asia, while U.S. contracts pointed to a muted start later on Wall Street. In corporate news, earnings are progressively taking centre stage with luxury group LVMH , Europe's most valuable company, due to report Q1 sales after the close, which will also be watched for indications on the strength of China's recovery. AB Volvo shares were set to jump at the open after the truck maker posted record Q1 profit as revenue and margins rose, in a sign the company had begun to overcome bottlenecks and inflation that had hurt the industry.
Eyes also on UBS after the Swiss parliament failed to approve the financial guarantees used to rescue Credit Suisse last month, in a largely symbolic vote.
(Danilo Masoni)
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NERVY MARKETS WAIT ON INFLATION REPORT, FED CUES (0558 GMT) Today marks what has become a monthly routine when investors hold their collective breath for the U.S inflation report, to gauge just how sticky prices are likely to be and the path the Fed will take to tackle inflation. Also due later in the day are minutes of the Fed's last meeting in March, when the central bank raised rates by 25 basis points and hinted that it may just be at the end of its hiking cycle. Investors will parse through the commentary to better understand the Fed's thinking about the turmoil in the banking sector, which had stoked expectations that the Fed may need to cut rates. But economic data along with rhetoric from Fed speakers have led markets to price in a two-thirds chance of a 25bp hike in May and standing pat thereafter, according to CME FedWatch tool.
And so, Asian shares are drifting, while gold soars and the dollar stalls. Philadelphia Federal Reserve Bank President Patrick Harker said he feels the Fed may soon be done raising interest rates as he reiterated that the central bank is committed to bringing inflation down to its 2% target.
The consumer price index is expected to show core inflation rose 0.4% on a monthly basis and 5.6% year-over-year in March, according to a Reuters poll of economists. Meanwhile, Switzerland's parliament on Tuesday failed to approve the 109 billion Swiss francs ($120.75 billion) of financial guarantees used to rescue embattled lender Credit Suisse last month, in a first-round vote that was largely symbolic given the state had committed the funds. Switzerland's upper house had approved the rescue earlier on Tuesday, meaning the two chambers of the legislative body will vote again on Wednesday. In corporate news, investors will watch out for first-quarter earnings from French luxury goods group LVMH that will likely shed light on demand from China after COVID-19 restrictions were lifted in that country late last year.
Elsewhere, Newmont Corp laid down a best and final offer for Australia's Newcrest Mining Ltd on Tuesday at A$29.4 billion ($19.5 billion) to close a deal that would extend Newmont's lead as the world's biggest gold producer.
Key developments that could influence markets on Wednesday: Economic events: Inflation reports from Serbia, Hungary; Bank of Canada rate decision; U.S. inflation report; Fed minutes Speakers: BOE Governor Andrew Bailey, ECB's Luis De Guindos
(Ankur Banerjee)
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