Markets Dawn Europe: Fri 19 by 7AM UKT (8AM CET)
Brief Podcast 🎙 + Data + Script
Podcast 🎙 ↑↑↑↑ Scroll down for the script.
Good morning,
An earlier than usual start today as geopolitical tensions in the Middle East escalated overnight triggering a steep sell-off across Asian markets.
Israel launched a drone attack on selected military targets inside Iran’s territory in the City of Isfahan, south of the capital. Local media report that Iran’s anti-drone and missile defence system managed to avoid significant damage. At this time, there’s limited footage to confirm the impact although explosions have been confirmed. Iranian officials deny any missile strike.
Crude oil prices are gaining more than 2% this morning with Brent at $89. Asian equities are falling sharply, with Taiwan down by more than 3%, Japan and Korea around 2%, and China, Hong Kong, Australia and Singapore lower by around 1%.
In equity futures markets, the Eurostoxx, Dax and the Nasdaq 100 are now down by nearly 2%, while FTSE and S&P 500 futures are 1% weaker. Bund futures are gaining 37 cents to 131.60 and Bitcoin is softer at $61,700.
There are no significant moves in currency markets this morning, besides a 0.35% daily appreciation for the Swiss franc.
Wall Street ended lower for a fifth straight session last night with Nasdaq down by 0.6%. Netflix reported solid Q1 results, beating sales ($9.37bn, +15% YoY) and profits ($2.33bn, +80% YoY) estimates as the number of subscribers jumps 16% to 270mn. Shares were almost unchanged as the company said it would no longer report subscriber details. Netflix’s total market value stands at $264bn.
In European earnings, Swiss engineering group ABB beat estimates with a strong Q1 report and positive guidance for this quarter. Shares advanced more than 6% to an all-time high and a market cap of $91bn. Germany’s medical equipment company, Sartorius, plunged 16% after missing estimates. It became one of the worst performers in the Dax index this year, together with Bayer and RWE.
Interest rates remained steady yesterday with limited moves as Bunds closed at 2.49%, Gilts at 4.27% and Treasuries at 4.65%, with significant moves expected today with the latest updates in the Middle East.
In economic data releases, it was an uneventful day with the only notable update being the Philly Fed Business index which measures the Mid-Atlantic manufacturing activity improving to a 2-year high. Today, Japan updated on inflation with headline CPI at 2.7% YoY and Core CPI cooling slightly to 2.6%.
In corporate deals, Britain’s Hipgnosis Songs Fund is being acquired by US-based Concord, a private equity-owned independent music company, for £1.1bn. Hipgnosis, which owns rights to Shakira’s and Neil Young’s song catalogue, saw shares rally 31%.
In IPOs, US digital marketing company Ibotta, raised $577mn on the NYSE. Shares were priced at $88, above the guidance range and rallied 17% to $103 and a market cap of $4.1bn on their debut yesterday, in another strong public offering in US markets.
Yesterday was an active day for Euro-denominated corporate bond issues. US companies General Mills (6.5 and 10 yrs) and Carnival (6 yrs)as well as Dutch firms Achmea (20 yrs), Boels (6 yrs) and JAB (10 yrs) raised more than €3bn.
In credit ratings, Meta Platform’s senior rating was upgraded one notch by Moody’s to Aa3 outlook stable. Also, Spain’s NH Hotel Group was upgraded two notches by Fitch to BB-.
Today’s data brings retail sales in the UK and producer prices in Germany. Also, India is holding the world’s largest general election today with incumbent Prime Minister Modi seeking to win a third consecutive term.
That’s all for today, have a nice weekend.