European Midday Briefing : Traders Await Another U.S. Inflation Read

MARKET WRAPS

Stocks:

European stocks struggled for momentum on Thursday as investor focus turned to more U.S. data.

Focus will center on U.S. producer prices and retail sales data, where signs of the U.S. economy holding up could further damp prospects of an early rate reduction.

"After higher-than-expected CPI and still robust jobs data last Friday, investors will look for additional signs of resiliency from the U.S. economy," UniCredit Research said.

U.S. Markets:

Stock futures pointed higher as investors awaited the producer-price index data.

Economists expect the PPI to have risen 0.3% in February, matching the pace of growth in January.

Stocks to Watch

Robinhood Markets rose 11% after the company said trading volumes rose in February, up 41% on the year.

United States Steel was rising 3.7%. It dropped 13% Wednesday after the Financial Times reported that President Biden intended to intervene in the company's planned takeover by Japan's Nippon Steel.

Forex:

U.S. retail sales data could act as a guide for the dollar's move against other currencies, such as sterling and euro, Brown Brothers Harriman said.

The dollar could regain some steam if the Fed looks likely to cut interest rates by less than the ECB will, Societe Generale Research said.

"The U.S. dollar has run out of momentum due to more mixed economic data."

Stronger growth is only dollar-friendly if it encourages the Fed to ease by less than the ECB does.

SocGen said sterling has been the strongest G10 currency so far this year thanks to markets pricing of a slow pace of interest-rate cuts by the Bank of England and is "clearly vulnerable" to a possible reversal in this trend.

"With weak economic growth and headline inflation falling, expectations about the pace of rate cuts may change."

Bonds:

The bearish outright momentum in fixed income markets--which drives bond yields higher--continues as long-end supply is taking its toll across curves, Commerzbank Research said.

"Bunds continue to trade heavy with gilts and Treasurys leading the way lower in global sovereign bond markets."

Long-end supply seems partly to blame as the 30-year U.K. syndication and anticipation of the 30-year Treasury tap Wednesday took their toll, Commerzbank added.

Energy:

Oil prices rose after data showed U.S. crude stockpiles shrunk, and Ukraine hit Russian refineries.

Positive pressure for prices were building after data confirmed a fall in U.S. oil inventories last week, and after Ukraine attacked major Russian oil refineries with drones, damaging around 12% of its oil-processing capacity, Swissquote Bank said.

It's possible prices will rise beyond the current range, though any increase is unlikely to be sustained when the geopolitical worries disappear from the headlines, it added.

Metals:

Metal prices were mixed, with gold and copper slipping back from prior highs but aluminum gaining ground.

Gold has struggled for direction after Tuesday's U.S. CPI data, fluctuating between gains and losses in a narrow band on Tuesday and Wednesday.

At the same time, copper prices were slightly lower, settling into a new range after rallying more than 3% on Wednesday to $8,920.

The metal's gains were fuelled by news that Chinese smelters are considering cutting capacity in the face of declining processing fees, Sucden Financial said.

EMEA HEADLINES

Another Top Credit Suisse Executive Leaves as UBS Integration Takes Hold

A Credit Suisse executive in charge of advising private-equity firms on their fundraising and secondary-market deals has left, the latest in a series of high-level exits since the investment bank's acquisition by Swiss rival UBS last year.

David Klein, who led Credit Suisse's global private fund group out of New York, left in recent months after nearly 21 years with the Zurich-headquartered investment bank, according to several people familiar with the matter.

Arms Maker Rheinmetall Forecasts Record Sales, Profit Growth Amid Rising Geopolitical Tensions

Rheinmetall expects sales and profit margins will continue to grow this year as the Ukraine and Israel-Hamas wars show little sign of abating and governments ramp up spending on military hardware.

The German arms maker said Thursday that sales should climb to around 10 billion euros ($10.95 billion) this year from the EUR7.18 billion reported for 2023. Rheinmetall expects an operating margin between 14% and 15%, above the 12.8% it posted for last year. Sales guidance is above analysts' EUR9.64 billion projection, while the operating margin is within expectations of 14.5%.

Hapag-Lloyd Expects Sharp Earnings Drop Amid Choppy Geopolitical Waters

Hapag-Lloyd expects earnings to fall sharply this year as the current situation in the Red Sea complicates an already challenging economic and political environment.

The container-shipping industry is suffering from a glut of vessels and not enough cargo to move, which has sent freight rates tumbling from their pandemic-fueled highs.

Shell to Slow Pace of Carbon-Emission Cuts

Shell plans to loosen its target for carbon-emission cuts from its operations, following the footsteps of rival BP, as Chief Executive Officer Wael Sawan focuses on last year's pledge to prioritize value.

The Anglo-Dutch energy heavyweight said Thursday that it now targets a 15%-20% reduction by 2030 in the net carbon intensity of the energy products it sells, compared with the 2016 base, while introducing a goal for customers' emissions.

GLOBAL NEWS

IEA Slightly Raises Oil-Demand Growth View But Cuts Supply Forecast

The International Energy Agency lifted its forecast for oil-demand growth this year on an improved outlook in the U.S. and increased bunkering, while it cut estimates for global supply on lower output expectations from OPEC+.

Oil-demand growth is now seen at 1.3 million barrels a day from a previous forecast of 1.2 million barrels a day, the Paris-based organization said. Total demand is expected to average 103.2 million barrels a day from previously 103 million barrels a day.

Biden Jump-Starts Electric-Vehicle Push With Massive Lithium Loan

WASHINGTON-The Biden administration is providing a shot of energy into America's flagging electric-vehicle industry.

The country's biggest lithium mining project is on track to get a $2.26 billion loan from the Energy Department, part of the administration's push to increase domestic production of the rechargeable batteries that power EVs.

Inside the Steel Deal That Has Biden on Edge

When Nippon Steel agreed to buy United States Steel in December, it looked like a victory for the Biden administration's attempts to revive American manufacturing.

The Japanese giant, whose imports once tormented American steelmakers, would make steel in the U.S. A faded industrial icon, U.S. Steel, would receive an injection of capital and technology. The U.S. and Japan would together take on China's dominance in the global steel market.

U.S. and China Extend Landmark Bilateral Deal, Very Quietly

SINGAPORE-When a landmark science and technology agreement between the U.S. and China reached its expiration in late February without an extension, it plunged the academic community in both countries into uncertainty. Neither country confirmed an extension for nine days.

Had it lapsed?

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

(END) Dow Jones Newswires

03-14-24 0646ET