LIFE MARKETS Sweden steals the show in the open
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SWEDEN STOLE SHOW AT OPEN (0820 GMT)
As expected, European equities opened in positive territory this morning.
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What was less obvious was that two shares from Sweden would steal the show.
First, the Swedish pharmaceutical manufacturer Orphan Biovitrum, also known as “Sobi”, fell as much as 22% after the American venture capital company Advent International and Singapore’s sovereign wealth fund withdrew their bid after receiving low acceptance levels.
Sobi is the worst performing stock across the entire STOXX 600, but another company from Abbas’ country is also the best performing.
Evolution rises close to 10% after announcing a buyback that seems to be music to investors’ ears.
Leaving individual shares aside, the session has started on a clear risk mood with travel and leisure shares leading the way with an increase of 2.3%.
Concerns about the pandemic and the Omicron variant still remain, but some investors have decided that some tactical dip purchases are in place.
Oil and gas and insurance companies are also up about 1%, while classic defensive games such as healthcare and consumer goods are close to losing.
It must be noted that although it is still very early on Wall Street, the mood there seems to be a little more cautious with mixed futures ahead of today’s NFP.
(Julien Ponthus)
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OMICRON AND PAYROLLS (TGIF) (0804 GMT)
Today’s non-agricultural payrolls, a reliable monthly snapshot of the US employment picture, come almost as an anticlimax. A more current indicator, weekly unemployment benefits released on Thursday, showed a figure of less than 2 million for the first time since March last year and redundancies at the lowest level in three decades. Read more .
Together with robust consumer and manufacturing data, this indicates that the Federal Reserve is likely to accelerate the pace of liquidating bond purchases, as its CEO Jerome Powell has suggested.
It is also already priced by the bond markets; The gap between two- and 10-year government interest rates has narrowed the most since June this week.
The payroll has the capacity to surprise; a shocking number below the 550,000 estimated by a Reuters poll among economists, is likely to cause concern. Especially since the data will not reflect interference from the latest Omicron variant of COVID.
Omicron remains a source of volatility mostly everywhere; German 10-year interest rates fell at the opening and are on their way back to the three-month lowest levels reached on Thursday after Europe’s largest economy expanded covid-consolation. And China’s service sector, vulnerable to covid outbreaks and containment measures, stumbled in November, the PMI showed.
Asia has its own concerns, not least over the ties between the United States and China. Technology stocks in Hong Kong (.HSTECH) fell to a two-month low following news that China’s Didi (DIDI.N) moved its listing from New York to Hong Kong, while other Asian app Grab fell 20% on its Nasdaq debut Read more.
Finally, do not forget about Chinese real estate problems, with developer Kaisa at risk of imminent bankruptcy. Read more
In any case, the mood can be at its peak. Thursday’s Wall Street bounce gave way to a weak Asian stock market, but European equities have opened firmer.
Key developments that should give more direction to the markets on Friday:
-US FTC sues to block Nvidia deal to buy Arm read more
ECB Speaker: President Lagarde, Chief Economist Philip Lane
-Final services PMI everywhere
-American non-agricultural wages
Emerging markets: Turkey CPI
-Fitch will review Italy’s credit rating
(Sujata Rao)
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EUROPE SETS HAVE WEEKLY WINS DESPITE OMICRON (0736 GMT)
Although European equities have not yet fully recovered from Friday’s Omicron shocks, the pan-European STOXX 600 is currently set for modest weekly gains despite a gloomy news flow.
In the large system, however, the European index is currently at 465 points, about 3% below levels when the world was still unaware that a new variant of covid-19 would trigger new travel restrictions.
With futures currently trading at around 0.6% this morning, dip buyers may be tempted to give it a try but some may decide to wait to get a look at US job data planned later today.
While few analysts believe that today’s NFP could change the Fed’s new focus on inflation, some volatility after the data is likely.
Among the news that investors will carefully assess this morning is the decision of the Chinese spectator giant Didi Global to delist from New York just five months after its debut and carry out a listing in Hong Kong.
Another is US competition authorities trying to block Nvidia’s $ 80 billion bid for British chip technology provider Arm.
Speaking of M&A, Australian biopharmaceutical giant CSL is in exclusive talks to buy Swiss pharmaceutical maker Vifor Pharma in a $ 7 billion deal, Australian media reported.
(Julien Ponthus)
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