European equities were firmer on Thursday after Jerome Powell offered reassurance on likely rate cuts, driving U.S. markets to snap a two-day losing streak.

And data that showed the eurozone's private-sector activity returned to growth last month, also helped lift investor sentiment.

"European markets are enjoying an upbeat start to the trading day, with the FTSE 100 being lifted by financials and the miners," Scope Markets said.

"The prospect of an improved environment for manufacturing and commodities does bring significant optimism for European indices, with traders looking increasingly confident that the economy could improve just as the central banks start to kick off their first rate cuts in June."

Stocks to Watch

Burberry's fiscal 2024 performance is unlikely to be positive as fourth-quarter sales are expected to decline at a double-digit rate across all regions, RBC Capital Markets said.

The sales slowdown is likely to drive potential inventory provisions, RBC said, which deteriorate margins and impact EBIT. RBC now pinpoints FY 2024 EBIT at GBP401 million, 8% below its previous estimate.

"We believe [market] consensus is likely to be revised downwards in coming weeks to reflect softness in topline trends, which is broad-based."

Looking ahead, FY 2025 is expected to be fairly stable, leaving little reason to be more optimistic for now, but a stabilization of like-for-like sales could drive a re-rating in the shares, RBC said.

Givaudan is likely to report good results for 2024, with a recovery in profitability, but a share rally prompted Baader Helvea to cut its recommendation on the stock to hold from add, while raising its target price to CHF3,950 from CHF3,250.

"The long-term attraction points of the industry and its No. 1 Givaudan--i.e. high entry barriers--remain fully intact; we just think new investors should wait for a better entry point," Baader said.

After a rise of about 20% in the share price of the company since its 2023 results, the stock now trades at a valuation above its ten-year historical average, Baader said.

U.S. Markets:

Stock futures edged up along with bond yields, with the benchmark 10-year Treasury yield trading around year-to-date highs.

Thursday will bring weekly jobless claims and earnings from Conagra Brands and a few other companies. But focus is likely to shift to the official monthly jobs report, due on Friday. Economists project the economy added about 200,000 jobs in March.


The euro rose to a 9-day high against a broadly weaker dollar, but the European Central Bank's account of the March meeting due at 1130 GMT could cap its gains, Brown Brothers Harriman said.

"The ECB March meeting account...will likely show broad agreement to cut rates in June [85% priced-in] and limit euro relief rallies."

Weak U.S. economic data could keep the Federal Reserve on track to cut interest rates and cause the dollar to fall, ING said.

Differing U.S. economic data have caused volatility in the dollar this week. The currency dropped after Wednesday's weaker-than-expected U.S. services ISM data, having previously jumped to a multi-week high against a basket of currencies due to Monday's strong manufacturing ISM data.

"The U.S. data is volatile at present and investors will just have to react to data when they see it," ING said.

However, it expects 105 could mark a peak in the DXY dollar index.

Central Banks

The Swiss central bank could be tempted to cut rates faster than currently expected as price rises continue to cool, Capital Economics said.

"Manufacturing firms are still reporting falling input prices, while low wage growth will constrain demand and limit input cost pressures at services firms."

The Riksbank's inflation forecasts could be too optimistic, with Handelsbanken expecting less near-term progress towards the 2% target. Krona weakness also suggests the central bank will need to move cautiously, so Handelsbanken sticks to its forecast for a first rate cut in June.


German Bunds have struggled to take comfort from below-consensus eurozone inflation data as the services print remained sticky near 4%, which could spoil expectations for a swift interest-rate cut cycle, Commerzbank Research said.

Government bond supply with heavy duration, coming from Spain and France, will be another factor to watch, Commerzbank said, adding that any relief after the auctions could be challenged by U.S. headwinds, as the market is pushing out further interest-rate cuts by the Federal Reserve.

"In sum, we maintain our cautious duration stance."

Pimco said expectations for the European Central Bank's interest-rate cuts and the level of 10-year eurozone government bond yields are broadly fair versus the U.S..

"Yet we see the balance of risks as leaning toward weaker economic performance and more easing from the ECB."

The 10-year Treasury-Bund yield spread is trading just below 200 basis points, a level it briefly rose above on Wednesday, driven by diverging paths, ING said.

"That will re-tighten eventually, but for now it's only wider."

That level was last breached for a short period in autumn last year. Expectations for upcoming key U.S. jobs and CPI releases are enough to put pressure for a rise towards 4.5% for the Treasury yield, ING said.

These developments contrast with eurozone rates where inflation expectations cemented market expectations for a June interest-rate cut by the European Central Bank.


Crude futures continued to trade at their highest levels since October on supply concerns, due to mounting geopolitical risks and OPEC+ output cuts.

OPEC+ kept its output policy unchanged on Wednesday and turned its focus on compliance, saying that members who oversupplied in the first quarter will soon present compensation plans.

"While this was widely expected, it provides some assurance that the recent rise in tension in the Middle East has not altered the group's view on the market," ANZ said.


Base metals were higher again, with speculative activity on the LME surging, which-combined with expectations of a relaxed monetary policy outlook in Europe-has sent prices to their highest levels in several months, Sucden Financial, said.

Gold and silver futures also made solid gains.

"We expect the forthcoming months to be favorable for precious metals, given the potential onset of monetary easing by major central banks and the increasing uncertainty surrounding the outcome of the U.S. elections, " Sucden said.

OCBC said gold prices may have further room to run in the medium term, citing factors such as expectations of a global easing cycle, central banks' continued purchases of bullion and a play-up of the precious metal's role as a geopolitical hedge.

COMEX gold futures' bullish momentum remains in play on the daily chart, given price action overnight together with the relative strength index indicator trending upwards, RHB said.

The 20-day and 50-day simple moving averages are still moving upward, suggesting the underlying trend remains bullish, and futures could extend the trend toward $2,400/oz followed by $2,500/oz, RHB said.

Despite Wednesday's break beyond the $2,300/oz resistance level, however, RHB doesn't rule out possibility of the precious metal undergoing profit-taking. It pegs support at $2,250/oz.

Iron Ore

Support looms for iron-ore prices after their recent decline, UBS said.

Iron-ore prices have fallen to $100/ton recently on weak Chinese steel output, high inventories and demand concerns, despite strong steel exports. UBS said construction should begin to recover from a slow period after the Lunar New Holiday and improve through April and May.

It sees iron-ore prices having cost support around $90-$100/ton in the near term. Still, UBS acknowledges the risk that Chinese steel output stays weak.


U.K. Businesses Expect Wage Rises to Slow, BOE Survey Shows

U.K. businesses expect wages to rise at a slower pace over the coming 12 months, a finding that will help reassure policy makers at the Bank of England that inflation has been tamed.

A survey of 2,422 businesses carried out by the BOE during March found that the average expected rise in wages eased to 4.9% from 5.2% in February. Those businesses reported that wages were 6.4% higher in the three months through March than in the same period a year earlier.

Airbus's Stratospheric Drone Business Is Open to IPO, CEO Says

An Airbus unit developing high-altitude drones that offer mobile connectivity and Earth observation services is open to an initial public offering after it launches commercial operations in the coming years, its chief executive told The Wall Street Journal.

Based in Farnborough just outside London, Aalto HAPS makes solar-powered, fixed-wing drones that operate above 60,000 feet. Known as Zephyr, these high-altitude platform stations, or HAPS, can be fitted with payloads that provide 5G connectivity as well as services such as wildfire prevention and border control via Earth observation.

Sanofi to Settle Claims That Heartburn Drug Zantac Caused Cancer

Sanofi said it reached an agreement in principle to settle about 4,000 claims around allegations that its heartburn drug Zantac caused cancer.

The company said in a statement on Wednesday that the financial terms of the deal are confidential. Sanofi said no concessions of liability had been made, and that it still believes the plaintiffs' claims that Zantac causes cancer are without merit.

PepsiCo and Carrefour End Food Fight, Returning Snacks and Drinks to Shelves

Pepsi and Cheetos are back in stock at Carrefour stores in France, ending an impasse over grocery prices that stretched for three months between one of the world's biggest food companies and one of Europe's largest grocers.

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04-04-24 0534ET