* European shares dip below 4-month highs
* U.S., China sketch outlines of trade deal -sources
* Trump threatens tariffs on European cars
Feb 21 - Welcome to the home for real-time coverage of European equity markets brought to
you by Reuters stocks reporters and anchored today by Danilo Masoni. Reach him on Messenger to
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BREXIT: AND THEN SUDDENLY AT 1128 GMT...(1214 GMT)
A strong disturbance in the force (as Obi-Wan Kenobi would say) occurred at 1128 GMT
precisely when this Reuters headline hit the screen:
21-Feb-2019 11:28:36 - BREXIT: UK GOVT SOURCE SAYS IT DOES NOT FEEL LIKE WE WILL HAVE A
BREXIT DEAL BY NEXT WEEK
The effects gradually faded away but the impact of that story sure was
spectacular as you can see below.
Moving forward, similar bursts of volatility seem unavoidable. This morning we had Juncker
saying he was not "very optimistic" while Hammond claimed talks had been constructive and that
Consensus still seems to be for a last minute deal being reached though.
core view remains that a deal will eventually be passed in Parliament, but only just."
"All other options, ranging from a no-deal exit to a second referendum, remain on the
table," he adds.
FROM EUROBOOM TO EUROGLOOM, ARE EXPECTATIONS TOO PESSIMISTIC? (1056 GMT)
The euro zone PMI this morning were mixed (terrible manufacturing and strong services) but
overall expectations over the region's economic performance have been worsening significantly
over the course of the past year.
The narrative has clearly shifted from euroboom in 2017 to eurogloom but have markets become
too pessimistic now? Perhaps the fact that the euro strengthened this morning after the French
business activity was surprisingly firm in February could be a clue.
that the bar for more disappointments is now fairly high.
"Uncertainty over Brexit and US-China trade relations is likely to persist over the coming
weeks and the risk of US import tariffs on European cars is something that might not be
sufficiently appreciated," they say.
"Hence, we can’t be sure that the string of negative surprises has come to an end. However,
we think the hurdle towards further growth disappointments in Europe is rising," they add.
Germany and France accounted for almost 90 percent of the sharp drop in their growth
surprise index but "that's not only because they are the heavy-weights in the index, but also
because they have been hit hard by a number of one-offs", they say.
Looking forward, the bounce back from these one-offs (flu wave, strikes, new car emissions
regime, low water in the Rhine, and the yellow vest protests) may be stronger than expected,
While benchmarks are holding around flat, stealing the show are some pretty significant
after allegations of money laundering.
Moeller-Maersk, the world's biggest container shipper, is down 8.7 percent after saying it
estimates trade restrictions introduced during 2018 will reduce global container trade growth by
0.3 to 1 percentage points per year in 2019-2020 if U.S. tariffs are increased to 25% in March.
Chipmaker Siltronic is down 8.4 percent after it cut its guidance, saying its cost positions
were negatively impacted by tariff increases and rising electricity costs in Germany.
French oil services firm TechnipFMC is also falling 8.2 percent after reporting a
fourth-quarter loss, and Centrica is down 11 percent after saying a cap on energy prices would
hurt its 2019 results.
Westernlink Interconnection, an electrical cable connecting Scotland and Wales.
Germany's ban on arms sales to Saudi Arabia.
drug drove a boost to profits. Barclays is up 3.7 percent after it showed signs of progress in
its under-pressure investment bank, where profit for the full year increased 15 percent to 2.6
billion pounds as its equities trading unit saw income rise 25 percent.
WHAT WE'RE WATCHING BEFORE THE OPEN (0753 GMT)
European shares are expected to open at fresh 4-month highs today with stock index futures
after the Fed minutes confirmed the central bank's dovish shift.
Speaking about trade, Trump said overnight the US would impose tariffs on European car
US, the threat is not new and a recent bounce in auto stocks indicates that investors remain
hopeful a worst-case scenario of a 25 percent import tariff could be avoided.
Elsewhere it's another heavy day for earnings reports.
Barclays reported a lower-than-forecast attributable profit for 2018, as it took a 150
million pound provision against Brexit losses and its under-pressure investment bank weathered a
at the open.
forecast its revenue and core earnings would continue to grow in 2019.
For more market-moving headlines check out the previous posts.
FUTURES POINT TO FURTHER GAINS (0722 GMT)
European stock index futures are up 0.1-0.3 percent with the STOXX 600 now likely to reach
fresh 4-month highs at the open.
Meanwhile we have some more corporate headlines that could liven up today's session.
Barclays reports 2018 profit of 3.5 bln stg, missing estimates
Outsourcer Serco lifts outlook as 2018 marks positive turning point
BAE Systems sees 2019 earnings growth despite geopolitical uncertainty
EARNINGS IN FOCUS: DEUTSCHE TELEKOM, INSURERS AND OTHERS (0655 GMT)
It's another day packed with earning updates.
Among the highlights so far is Deutsche Telekom which forecast that revenue and
core earnings would continue to grow in 2019, sending its shares up 1.5 percent in pre-market
charges related to its the IPO of its US unit as well as the impact of a spate of natural
other companies are due to report their results later on.
Auto stocks will also remain in the spotlight after Trump said overnight the USwould
impose tariffs on European car imports if it cannot reach a trade deal with the European Union.
"We're trying to make a deal. They're very tough to make a deal with - the EU," Trump said.
"If we don't make the deal, we'll do the tariffs."
Here's your headlines round-up:
Deutsche Telekom sees 3 pct growth in core 2019 earnings
Insurer AXA reports lower 2018 net profit after IPO costs and natural disaster
Swiss Re 2018 net profit up 27 percent despite big claims
GAM assets under pressure, sees "challenging" 2019
AccorHotels' 2018 profit rises, beefs up lifestyle loyalty initiatives
Standard Chartered sets aside $900 mln to cover U.S., British fines
UBS CEO says French appeals process to take "several years"
Millicom spends $1.65 bln on Telefonica Central America mobile businesses
Swedbank confident about its anti-money laundering measures
Slovenian bank NLB 2018 net profit falls by 10 percent
MORNING CALL: EUROPEAN SHARES SEEN HIGHER (0621 GMT)
European shares are expected to open higher this morning, supported by renewed optimism over
a possible trade deal between the United States and China and more patience signalled by the
Frankfurt's DAX to open 66 points higher at 11,468 and Paris' CAC to open 24 points higher at
"Renewed signals of a trade agreement harvested a risk on sentiment overnight, putting fresh
legs on the risk-on rally which had been showing signs of slowing," says Jasper Lawler, Head of
Research at LCG.
According to sources familiar with the trade negotiations, the US and China have started to
outline commitments in principle on the stickiest issues in their trade dispute, marking the
most significant progress yet toward ending a seven-month trade war.
Later in the session eyes will be on a barrage of data in Europe with PMI squarely in focus.
"PMI figures from the bloc, in addition to German inflation and minutes from the ECB
monetary policy meeting mean a volatile session could be ahead," adds Lawler.
Besides the macro, it's another heavy day for earnings reports.