* European shares tumble 0.5 pct
* Eyes on ECB policy meeting
* Fed raises rates as expected, signals 2 more rate hikes this year
June 14 (Reuters) - Welcome to the home for real-time coverage of European equity markets
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OIL EXPLORATION BUDGETS? "THERE'S FLEXIBILITY TO THE UPSIDE" (1030 GMT)
The oil price rally has made the energy sector one of the best-performing in Europe
but investors remain on the lookout for any further sign of improvement.
oil companies may also have room to increase their exploration budgets this year.
"This (demand for seismic) is being driven by a range of customers from majors to smaller
E&Ps and by a number of geographies (West Africa and South America were highlighted as 'hot
spots') suggesting that the confidence improvement is widespread," they say in a note.
"Customer conversations also suggest that there is some flexibility to the upside in
exploration budgets for 2018 if oil prices remain around $75/bbl (this was seismic specific so
does not mean overall spend is going up)," they add.
ECB MEETING: THE END OF QE? (0854 GMT)
Analysts and investors are weighing in with their thoughts ahead of the ECB's meeting today
with high expectations that the end of QE could be signalled. It's an interesting divide between
those who think the recent political shake-up in Italy is spurring the ECB to act sooner, and
those who think it will in fact be a motivation to put the brakes on.
Paul Donovan, chief economist at UBS Wealth Management, has a good summary of expectations:
"There are hopes of either 1) an announcement of the timetable to end bond buying, or 2) an
announcement of an announcement of the timetable to end bond buying."
Arne Petimezas, rates analyst at AFS in Amsterdam, says: "I think they will announce that
they will announce the final taper of QE for the fourth quarter today, and say not much else.
There have been rumours that decision could be delayed to July, but with Italy they want to
teach people a lesson."
One trading desk sent this note round: "It'll discuss, and possibly announce, an end to
asset purchases, even as more evidence of slowing growth emerges. But there's unlikely to be
anything specific about rates."
the ECB QE program was always expected to be in 2018 – the timing of the announcement, against a
backdrop of under-performing equity markets and renewed political turmoil in Italy and Spain,
appears strange in our view. If nothing else, such definitive action takes away optionality and
flexibility for the ECB at a time when these feel like a distinct benefit."
And one investor points out the ECB will not only have to take into account European
economic forces but also global ones, with European companies so reliant on emerging market
growth: "Draghi is pretty stuck - Europe is slowing down and if U.S. rate rises impact on
emerging growth that's an added problem for Europe."
Here's a reminder of the ECB's massive asset purchase programme:
OPENING SNAPSHOT: EUROPEAN SHARES FALL AFTER FED AS ECB LOOMS(0718 GMT)
Sandwiched between two central bank meetings, European shares are selling off this morning
after a more hawkish than expected Fed signalled two more rate hikes this year, more than the
market had priced in.
Bank stocks are leading falls across European benchmarks with all the STOXX 600 sectors in
A crucial ECB meeting also awaits investors anxiously anticipating more concrete guidance
from Draghi on when to expect the end of QE.
Shining among the selling are Aveva, jumping 8.4 percent after its full-year revenues rose,
WHAT YOU NEED TO KNOW BEFORE THE OPEN (0652 GMT)
European shares are set to open lower with rate-sensitive sectors in the spotlight after the
Fed signalled two more interest rate hikes this year and ahead an ECB meeting that will debate
whether to end its asset purchases by year-end.
The pan-European STOXX 600 index has been moving within a tight 2-percent range since end
May and it is unlikely to deviate from that today with futures last trading down 0.4-0.6
Autos, recently hit by worries of higher US import tariffs, could also be in focus after
news of a 1 billion-euro fine for VW over emissions cheating and an FT report saying that
Renault CEO will likely step down before his mandate ends. VW shares are seen down 1 pct in
Other stock movers: Rolls-Royce to cut 4,600 jobs to save 400 mln stg a year (+1% pre-mkt);
GSK's two-drug HIV treatment meets main goal in late stage studies (+1-2% pre-mkt); Sweden's
radio; Fashion retailer Gerry Weber issues a profit warning and said it was implementing a
restructuring programme (-7% pre-mkt)
For more headlines check out the previous post.
EARLY MORNING HEADLINES ROUND-UP: AUTOS IN FOCUS (0554 GMT)
Turning to corporate news that could move single stocks today, here are the top headlines
that caught our attention.
It looks that the auto sector, recently hit by worries the US could apply higher import
tariffs, could be in the spotlight with VW fined 1 billion euros over emission cheating and a
report saying Renault CEO will likely step down before his mandate ends.
VW fined 1 bln euros by German prosecutors over emissions cheating
Italian banks to shed 70 bln euros in bad loans this year -PwC
Italy's Benettons tap GIC among bidders for Cellnex holding vehicle - sources
And here some top market headlines:
> Asian shares slip on Fed hike, trade fears and soft China data
> Wall St falls as Fed signals two more hikes this year
> Nikkei drops, risk sentiment hit by hawkish Fed tone, trade war worries
> U.S. yields climb after Fed flags 2 more rate hikes this year
> Fed-driven dollar surge fades, focus moves to ECB meeting
> Gold slips as Fed signals more rate hikes, but trade worries limit losses
> Copper slips to near one-week low after soft China data
> Oil falls on lower China refining activity, fresh U.S. crude output record
MORNING CALL: EUROPEAN SHARES SEEN DOWN AFTER FED, BEFORE ECB (0513 GMT)
European shares are expected to open lower this morning after the Federal Reserve raised
interest rates and signalled two more hikes this year and ahead of the European
Central Bank meeting that will debate whether to end its huge asset purchases by year-end
Here are your morning calls, courtesy of David Buik at CORE SPREADS.
Over in Asia, the Fed's more hawkish tone in forecasting a slightly faster pace of
tightening drove shares lower, while concerns about U.S.-China trade frictions kept investors on
edge. Here are the highlights of our latest global markets report.
* Fed raised rates as expected, sees 2 more rate hikes this year
* Concerns about U.S.-China trade war cast shadow
* China data surprisingly soft
* Dollar quickly loses steam after jump on Fed, focus on ECB