EMEA Morning Briefing : Stock Futures Fall; U.S. Data Awaited

MARKET WRAPS

Watch For:

Germany CPI; trading updates from Ashtead Group, British American Tobacco

Opening Call:

European stock futures point to a lower open Tuesday, while Asian benchmarks gain on optimism over China stimulus. The dollar and Treasury yields were steady; oil futures fell; while gold gained.

Equities:

Stock futures were lower early Tuesday, tracking declines in U.S. indexes overnight. European indexes had notched gains overnight amid signs of more forceful China stimulus to come next year.

Data earlier Tuesday showed Chinese export growth slowing unexpectedly in November, falling short of expectations that tariff risks would prompt businesses to front-load shipments.

Markets continue to await U.S. consumer inflation data and an annual meeting in China, where policymakers are expected to set next year's growth target.

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Fitch Ratings expects neutral credit conditions in the Middle East and North Africa region in 2025, as fairly stable oil prices and reasonable economic growth will be balanced against high but contained political and geopolitical risk.

The agency also said Israel has a negative outlook, reflecting "risks related to the course of the Middle East war and its implications for public finances and economic activity."

Forex:

Currencies appear to be range-bound ahead of the U.S. November CPI data due Wednesday, Maybank said. While there might be some preliminary optimism building partly due to rising Chinese equities, it remains to be seen if this can be sustained, the bank added.

Bonds:

Yields on U.S. government debt finished slightly higher overnight as traders assessed geopolitical events ranging from the overthrow of Syria's government to China's efforts to kick-start its sputtering economy.

"While these developments offer meaningful context for the global economy and geopolitics more broadly, there has been little urgency on the part of investors in the U.S. rates market to respond. Perhaps this reflects a further decoupling of sentiment between the U.S. and the rest of the global economy," said BMO Capital Markets.

Energy:

The events in Syria should "marginally" increase oil's geopolitical risk premium in the next few weeks, and the risk of regional spillover adds further uncertainty, said Jorge Leon, head of geopolitical analysis at Rystad Energy. The country isn't a major oil producer, but it "holds huge geopolitical clout due to its location and ties with Russia and Iran," he said.

The events may also "somewhat reduce" the risk premium well into next year, as a "weakened Iranian regime might be more willing to reach an agreement with the U.S. to avoid economic pressures that might [lead] to more anger domestically," he said.

Metals:

Gold rose early Tuesday after China's top decision-making body pledged on Monday to implement more proactive fiscal policy and to adopt a "moderately loose" monetary policy next year.

There are hopes of further stimulus, said Fawad Razaqzada, market analyst at City Index and forex.com. There's anticipation that such measures could help boost consumer confidence to the point that it results in an increase in gold demand in China, he added.

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While overall market sentiment is bullish due to supportive comments from Chinese policymakers signaling stronger stimulus to come, there are lingering doubts surrounding China's long-term growth prospects, particularly in the construction sector, said Daria Efanova, head of research at Sucden Financial.

It will require more than just stimulus measures to truly reignite economic growth, and this has kept investors in the metals market more cautious, Efanova said.

TODAY'S TOP HEADLINES

China's Exports Growth Slows Unexpectedly

China's exports grew at a slower pace in November, falling short of economists' expectations, with many having thought that tariff risks would prompt businesses to front-load shipments.

Exports grew 6.7% from a year earlier in November, down from October's 12.7% jump, according to data released Tuesday by the General Administration of Customs Bureau.

Novo Nordisk Just Got One Step Closer to Resolving Wegovy Supply Issue

Novo Nordisk got European approval to move forward with its planned buyout of U.S.-based drug manufacturer Catalent, which produces much of its popular obesity drug Wegovy. That leaves the U.S. Federal Trade Commission as the last hurdle to overcome.

The European Commission said that the proposed deal "wouldn't raise competition concerns on any of the markets examined" and that customers of pre-filled syringes and orally disintegrating tablets would continue to have sufficient alternatives if the merger was approved.

Vivendi Shareholders Back Break-Up Plans

Vivendi said shareholders gave it the go-ahead to break up and list its core businesses on the stock market, paving the way for a major structural overhaul of the conglomerate steered by the family of French billionaire Vincent Bollore.

The company said more than 97.5% of votes at a shareholders' meeting were in favor of plans to spin off its television business Canal+, its advertising and public relations business Havas and create a new company known as Louis Hachette Group to consolidate Vivendi's assets in publishing.

TikTok Filed Emergency Motion to Pause U.S. Ban. Here's What That Means.

TikTok and owner ByteDance filed an emergency motion on Monday to pause the app's looming U.S. ban.

In a statement to Barron's, a TikTok spokesperson said that the company had filed an emergency motion for an injunction to stop the TikTok ban from taking effect on Jan. 19 until the appeal of the decision by the Court of Appeals for the District of Columbia is heard by the Supreme Court.

Rupert Murdoch Loses Bid to Change Control of Family Trust

A Nevada probate commissioner rejected Rupert Murdoch's attempt to give control of his media assets to his oldest son when he dies, rather than dividing it among four children, according to people familiar with the matter.

Murdoch, 93 years old, had sought to amend a trust holding the family's assets, which include roughly 40% voting stakes in Wall Street Journal owner News Corp and Fox News parent Fox Corp.

Jeep Maker Stellantis Shakes Up North American Executive Ranks

Jeep maker Stellantis is shuffling its executive ranks in North America, a trouble spot that contributed to the recent departure of Chief Executive Carlos Tavares.

The changes include the return of company veteran Timothy Kuniskis, who retired under Tavares' tenure in June, to run Stellantis's Ram truck brand, a Stellantis spokeswoman said. The company also named a new U.S. sales chief.

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Expected Major Events for Tuesday

00:01/UK: Nov UK Nations and Regions Growth Tracker

00:01/UK: 1Q Manpower UK Employment Outlook Survey

05:30/NED: Oct Manufacturing output

05:30/NED: Nov CPI

06:00/FIN: Oct Industrial Production

07:00/SWE: Oct New orders & deliveries in industry

07:00/SWE: Oct Industrial Production Index

07:00/GER: Nov CPI

07:00/NOR: Nov CPI

07:00/ROM: Oct International trade

07:00/DEN: Nov CPI

07:00/TUR: Oct Employment / Unemployment

07:00/TUR: Oct Industrial Production Index

07:30/HUN: Nov CPI

08:00/AUT: Oct Production Index

08:00/SVK: Oct Industrial production

08:00/CZE: Nov CPI

08:00/CZE: Oct Import & export price indices

09:00/ICE: Nov External trade, preliminary figures

09:00/ITA: Oct Industrial Production

09:00/BUL: Oct Industrial Production

09:30/UK: 3Q Mortgage Lenders and Administrators Return (MLAR) statistics

10:00/GRE: Nov CPI

10:00/GRE: Oct Industrial Production Index

10:00/LUX: Oct Industrial Production

10:00/CYP: Oct Foreign Trade (provisional)

10:00/MLT: Oct International Trade

11:00/POR: Oct International trade statistics

16:59/SWI: 2Q Locational & Consolidated banking statistics

16:59/SWI: 3Q International debt securities statistics

16:59/SWI: 2Q Domestic debt securities statistics

16:59/SWI: 3Q Exchange-traded derivatives statistics

All times in GMT. Powered by Onclusive and Dow Jones.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

12-10-24 0016ET