MARKETS EUROPE/stock markets hardly changed before Fed interest rate decision

FRANKFURT (Dow Jones) — The European stock markets showed little change on Tuesday afternoon. They have thus given back the profits they have seen in the meantime. The DAX gains one point to 13,940 points, the Euro-Stoxx-50 is up 0.1 percent to 3,735 points.

Market participants are reporting quiet trading in the run-up to the US Federal Reserve meeting, and the interest rate decision is due on Wednesday after the end of trading in Europe. However, according to one market participant, the Fed is no longer able to surprise negatively. An increase of 50 basis points is expected, and a rate hike of 75 basis points is even considered possible for the June meeting. “On the other hand, the problems are still unresolved,” it says, with a view to the war in Ukraine and the supply chain problems.

Ten-year yields on Bunds briefly at 1 percent

The yield on ten-year Bunds briefly surpassed the 1 percent mark – for the first time since 2014. Since the beginning of the year, it has already risen by more than 100 basis points. One of the drivers is speculation that the European Central Bank (ECB) will raise interest rates sooner.

The rate hike in Germany follows US Treasuries and UK Gilts, whose yields have risen above key levels of 3 and 2 percent respectively. The background to the globally rising yields and falling bond prices are the efforts of the central banks to get inflation under control with a tighter monetary policy. Bunds with a term of ten years are currently yielding significantly lower again at 0.91 percent.

Banks firm on BNP numbers

Banks are among the winners on the European stock exchanges. Your Stoxx industry index gains 1.7 percent. In addition to rising interest rates, the quarterly figures from BNP Paribas, which surprised positively, are also having a supportive effect. Net profit for the first quarter was 2.11 billion euros, according to the Royal Bank of Canada (RBC), above consensus expectations of 1.25 billion euros. According to the factset consensus, analysts had expected a slight decline in revenue. RBC also assumed that the general market weakness would affect BNP Paribas’ business. BNP shares are up 4.2 percent.

“The numbers are good,” says a market participant in Deutsche Post’s interim report. “They are about 10 percent wider than expected,” he says. The house only confirmed the view. “However, the figures now provide a good basis for at least achieving the outlook,” he says, adding: “It would have been presumptuous to raise the outlook in the current environment.” Deutsche Post lose 0.7 percent.

After a profit warning, Covestro led the list of losers in the DAX with sales of 6.8 percent. According to Jefferies, the extent of the reduction in the EBITDA forecast for 2022 to between 2 and 2.5 (Jefferies estimate: 2.4; consensus: 2.7) billion euros shows the considerable uncertainties on the global chemical raw materials markets and speaks for the assessment of the Analysts that better-than-expected earnings cannot be rolled over into the first quarter of 2022.

Logitech lowers the outlook

Logitech is now down 2.6 percent after initial gains. The computer equipment supplier was able to present new record sales figures, although the wave of working from home has died down. The announced drop in profits due to investments turned out to be less than expected. However, the outlook had to be lowered as it now excludes the contribution from business with Russia and Ukraine.

According to business figures in Oslo, Telenor is down 4.5 percent. According to Jefferies, EBITDA was 3 percent below estimates. Although the outlook was confirmed, management warned that the pressure would continue in the second quarter. The group’s consolidation efforts are supportive.

On a positive note, BP said the oil multinational’s $2.5 billion share buyback plan for the second quarter met the company’s forecast of returning 60 percent of excess cash to shareholders. And according to JPMorgan analyst Christyan Malek, there was plenty of excess cash from oil and gas trading during the quarter. Earnings and cash flow both beat consensus, Malek said. The stock gains 4.3 percent.

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Stock index last +/-% absolute +/-% YTD

Euro Stoxx 50 3,735.20 +0.1% 2.76 -13.1%

Stoxx 50 3,673.97 +0.0% 0.78 -3.8%

DAX 13,939.62 +0.0% 0.55 -12.3%

MDAX 29,787.03 +0.9% 265.62 -15.2%

TecDAX 3,066.26 +0.1% 4.31 -21.8%

SDAX 13,688.62 +0.6% 84.58 -16.6%

FTSE 7,522.34 -0.3% -22.21 +2.2%

CAC 6,435.51 +0.2% 9.90 -10.0%

Fixed income market last absolute +/- YTD

German ten-year return 0.91 -0.05 +1.09

US 10-year yield 2.92 -0.06 +1.41

FOREX last +/- % Tue 8:06 Mon 17:03 % YTD

EUR/USD 1.0551 +0.4% 1.0508 1.0518 -7.2%

EUR/JPY 137.04 +0.2% 136.69 137.01 +4.7%

EUR/CHF 1.0290 +0.2% 1.0279 1.0283 -0.8%

EUR/GBP 0.8419 +0.1% 0.8393 0.8403 +0.2%

USD/JPY 129.86 -0.3% 130.09 130.22 +12.8%

GBP/USD 1.2535 +0.4% 1.2519 1.2517 -7.4%

USD/CNH (Offshore) 6.6661 -0.2% 6.6870 6.6791 +4.9%

Bitcoin

BTC/USD 38,297.34 -0.9% 38,522.37 38,757.40 -17.2%

ROHL last VT-Settl. +/- % +/- USD % YTD

WTI/Nymex 104.45 105.17 -0.7% -0.72 +42.4%

Brent/ICE 106.50 107.58 -1.0% -1.08 +40.2%

METALS last day before +/- % +/- USD % YTD

Gold (Spot) 1,871.73 1,863.05 +0.5% +8.68 +2.3%

Silver (Spot) 22.76 22.65 +0.5% +0.11 -2.4%

Platinum (Spot) 971.65 938.85 +3.5% +32.80 +0.1%

Copper Future 4.30 4.26 +0.9% +0.04 -3.4%

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DJG/thl/ros

(END) Dow Jones Newswires

May 03, 2022 10:03 ET (14:03 GMT)