| Want the lowdown on what's moving European markets in your inbox every morning? Sign up here. Good morning. European stock futures are pointing higher on a huge day for corporate earnings and economic data. Here's what's moving markets. Earnings Rush Anyone with an interest in European earnings is preparing for the busiest day so far this year, as firms worth more than $2 trillion are due to report. The difference this season is that many of us are working from kitchen tables or offices we've thrown together in living rooms, spare rooms and -- judging by today's weather forecast -- gardens. More than 60 companies in the Stoxx 600 Index are set to update. Nestle SA and AstraZeneca Plc are among headliners, while lender Standard Chartered Plc topped estimates earlier and is set to begin a new round of job cuts, and peer Credit Suisse Group AG reported a smaller-than-expected loan loss provision. In the U.S., technology giants Apple Inc., Amazon.com Inc., Alphabet Inc. and Facebook Inc. -- which all defended themselves in Congress on Wednesday against antitrust allegations -- are coming later. Futures Higher European futures are edging higher after mixed trading in Asia, where shares climbed in South Korea as Samsung Electronics Co. topped estimates, but gains fizzled in Japan. An index tracking the dollar slipped after the Fed kept rates near zero and pledged to use all of its tools to support the recovery from the coronavirus pandemic. On the virus front, health officials across Asia are facing a wave of Covid-19 outbreaks, while in this region, The European Union showed no sign of reopening its doors to Americans and British Prime Minister Boris Johnson came under fire from members of his own party over the "muddled" approach to quarantining arrivals. Finally, oil was steady after the biggest decline in U.S. crude inventories this year. Troops To Leave Germany The U.S. announced plans to withdraw about 12,000 troops from Germany. President Donald Trump, who has frequently complained about German defense spending, signalled the move was largely about punishing the European country: "They've taken advantage of us for many years," Trump told reporters. "We don't want to be the suckers anymore," he added. Trump has long said Germany and other partners in the North Atlantic Treaty Organization should ramp up efforts to meet the alliance's goal that all members spend at least 2% of gross domestic product on defense. A U.S. official said the process, which would leave about 24,000 forces in Germany, would probably take years. Huge Contraction Data due today is expected to show the U.S. economy contracted by 35% on an annualized basis in the second quarter, the steepest decline on record, due to Covid-19 lockdowns. "Just about every component of gross domestic product should be a drag on growth in 2Q, with weakness primarily led by consumption," Citi economist Veronica Clark wrote in a note to clients Tuesday, though the bank says a reopening rebound in May and June implies a strong bounce-back in the third quarter. Coming Up… As well as the earnings deluge, there's a raft of macroeconomic data coming from this region too, including German gross domestic product and inflation and unemployment from the euro area. Finally, if you need a distraction from all the markets excitement, NASA is scheduled to launch its Mars 2020 Perseverance Rover on a trip to Mars. What We've Been Reading This is what's caught our eye over the past 24 hours. And finally, here's what Cormac Mullen is interested in this morning Emerging market stock bulls got a technical boost this week with a golden cross pattern triggered in a major benchmark. The MSCI Emerging Markets Index saw its 50-day moving average crossing above its 200-day equivalent, a signal often seen as leading to further gains. The EM equity gauge is up a healthy 9% so far this month, handily beating the 5% gain in its developed market counterpart, as investors bid up the price of developing nation shares amid the dollar's slide. But EM investors should be wary of getting too bullish about the weak dollar narrative, as the stock outperformance isn't being matched in the currency space. As my colleague Srinivasan Sivabalan points out, the MSCI gauge of emerging-market exchange rates is up a mere 0.4% for every one percent decline in the dollar, far below the average 1.4% seen in the months the greenback posted losses over the past three years. And as I noted last week, the Asian dollar index still hasn't climbed out of its downtrend. Possible reasons for the sluggish currency moves include the resurgent coronavirus, falling remittances from overseas workers and increased U.S.-China tensions. Of course these are pertinent for the equity market too and suggest investors be careful about chasing the bullish EM trend too hard.  Cormac Mullen is a Cross-Asset reporter and editor for Bloomberg News in Tokyo. Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. | 
Post a Comment