UK Markets closed

LIVE MARKETS-Brexit: And then suddenly at 1128 GMT...

* European shares dip below 4-month highs

* U.S., China sketch outlines of trade deal -sources

* Centrica (Frankfurt: A0DK6K - news) , Maersk down after results; Barclays (LSE: BARC.L - news) up

* 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

share your thoughts on market moves: danilo.masoni.thomsonreuters.com@reuters.net

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

MPs (BSE: MPSLTD.BO - news) could vote on a revised deal as early as next week.

Consensus still seems to be for a last minute deal being reached though.

Christopher Graham from Standard Chartered (BSE: 580001.BO - news) kind of captures the mood in his note today: "our

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.


(Julien Ponthus)

*****

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.


UBS (LSE: 0QNR.L - news) economists Anna Titareva, Reinhard Clus, Felix Huefner have looked into this to conclude

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,

they say.


(Danilo Masoni)

*****

OPENING SNAPSHOT: SOME BIG SLIDES FROM CENTRICA, MOELLER-MAERSK, SWEDBANK (Swiss: SWEDA.SW - news) (AGAIN) (0851 GMT)

While benchmarks are holding around flat, stealing the show are some pretty significant

falls after results from Moeller-Maersk, Siltronic (IOB: 0R8P.IL - news) , Centrica, and Hays (LSE: HAS.L - news) while Swedish lender

Swedbank (LSE: 0H6T.L - news) falls another 7.2 percent to its lowest since July 2016 in the second day of falls

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.

Italian cable maker Prysmian (EUREX: 3056144.EX - news) is tumbling 8.6 percent after reporting a system failure in

Westernlink Interconnection, an electrical cable connecting Scotland and Wales.

And UK defence firm BAE Systems (LSE: BA.L - news) is down 5.8 percent after warning it could be hit by

Germany's ban on arms sales to Saudi Arabia.

On the positive side a rare gainer is Genmab (LSE: 0MGB.L - news) , up 7.9 percent after reporting its Darzalex

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.

(Helen Reid)

*****

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

up 0.1-0.5 percent as markets remain constructive on optimism over a Sino (Dusseldorf: 1205802.DU - news) -US trade deal and

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

imports if it cannot reach a trade deal with the European Union. Even (Taiwan OTC: 6436.TWO - news) though the remarks could

weigh on autos, especially German carmakers Daimler (IOB: 0NXX.IL - news) , BMW (EUREX: BMWE.EX - news) and VW which are highly exposed to the

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

difficult fourth quarter. Capital (Other OTC: CGHC - news) however beat expectations and Barclays shares are seen rising

at the open.

Shares (Berlin: DI6.BE - news) in UK defence contractor BAE and French engineering firm Technip (LSE: 0IEB.L - news) are seen falling

after their updates, while calls are mixed for Deutsche Telekom (IOB: 0MPH.IL - news) after the telecoms group

forecast its revenue and core earnings would continue to grow in 2019.

For more market-moving headlines check out the previous posts.

(Danilo Masoni)

*****

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

Relx (Frankfurt: RDEB.F - news) sees solid business growth continuing in 2019

Outsourcer Serco lifts outlook as 2018 marks positive turning point

BAE Systems sees 2019 earnings growth despite geopolitical uncertainty

(Danilo Masoni)

*****

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

trade, while results from insurers look mixed: AXA (Paris: FR0000120628 - news) posted lower profit as a result of

charges related to its the IPO of its US unit as well as the impact of a spate of natural

disasters, while net profit at Swiss RE (LSE: 0QL6.L - news) rose despite big claims.

We also have early updates from Accor Hotels and GAM Holding (IOB: 0QN3.IL - news) and many

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

MEDIA-Deutsche Bank (IOB: 0H7D.IL - news) lost $1.6 bln on a bond bet- WSJ

UBS CEO says French appeals process to take "several years"

France's Wendel (LSE: 0HZD.L - news) to sell 40 pct stake in Allied Universal to Canada fund

Millicom spends $1.65 bln on Telefonica Central America mobile businesses

Glencore (Frankfurt: 8GC.F - news) will 'vigorously contest' $680 million tax demand

Swedbank confident about its anti-money laundering measures

Slovenian bank NLB 2018 net profit falls by 10 percent

Italian payment services group SIA (Shanghai: 600009.SS - news) may list on stock market -CEO

(Danilo Masoni)

****

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

Federal Reserve.

Financial spreadbetters at IG (Frankfurt: A0EARV - news) expect London's FTSE to open 7 points higher at 7,235,

Frankfurt's DAX to open 66 points higher at 11,468 and Paris' CAC to open 24 points higher at

5,220.

"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.


(Danilo Masoni)

*****