MORNING BRIEFING - Germany/Europe

DJ MORNING BRIEFING - Germany/Europe

The morning market overview, compiled by Dow Jones Newswires.

HOLIDAY NOTICE

THURSDAY: Stock trading in Moscow is suspended due to the national holiday.

FRIDAY: Stock exchange trading is suspended in Moscow because International Women's Day is being celebrated at a later date.

TOPIC OF THE DAY

China apparently reserves the right to tighten its easing of rare earth export restrictions again. Beijing will limit rare earth export licenses for US automakers and other manufacturers to six months, people familiar with the matter said. Chinese negotiators agreed to the temporary restoration of export licenses during negotiations in London. The agreement in London is intended to ease trade tensions between the two countries and maintain an agreement reached in Geneva in May. In return, according to the informants, US negotiators agreed to relax some of the recent restrictions on the sale of industrial goods such as aircraft engines and related products. This also applies to the export of ethane, which is needed in plastics production. Details of the agreement are still being worked out, the informants said. The White House declined to comment.

COMPANY OUTLOOK

08:00 DE/Deutsche Bank AG, CEO Sewing at Goldman Sachs' European Financials Conference

11:00 DE/Jenoptik AG, AGM

2:00 p.m. US/Blackrock Inc, Investor Day

14:15 DE/Commerzbank AG, CEO Orlopp at Goldman Sachs' European Financials Conference

22:05 US/Adobe Inc, 2Q results

DIVIDEND DISCOUNT

(for German stocks and stocks from the Stoxx or Euro Stoxx 50 index)

 Company Dividend
Bremer Lagerhaus 0.50 EUR
Eurokai 1.50 EUR + 0.50 EUR special dividend
Hawesko 1.30 EUR
Instone 0.26 EUR
Surteco 0.30 EUR

ECONOMIC OUTLOOK

 - GB
08:00 GDP month April
 FORECAST: -0.1% yoy/+1.1% yoy
previously: +0.2% y/+1.1% y/y
Three-month installment
PROGNOSIS: n/a
previously: +0.7% qoq/+1.2% y/y

Trade balance April
PROGNOSIS: n/a
previously: -19.9 billion GBP

Industrial production April
 FORECAST: -0.5% yoy/-0.2% yoy
previously: -0.7% y-o-y/-0.7% y-o-y

- US
14:30 Initial applications for unemployment benefits (week)
FORECAST: 246,000
previously: 247,000

Producer prices May
FORECAST: +0.2% y/y
previously: -0.5% vs. Vm
Core rate (excluding food and energy)
FORECAST: +0.3% y/y
previously: -0.4% y-o-y

OVERVIEW FUTURES / INDICES

 Current:
Index last +/- %
DAX Futures 23,818.00 -0.2%
E-Mini Future S&P 500 6,007.60 -0.2%
E-Mini Future Nasdaq-100 21,815.60 -0.2%
Nikkei-225 (Tokyo) 38,182.28 -0.6%
Hang-Seng (Hongk.) 24,211.79 -0.6%
Shanghai-Comp. 3,405.17 +0.1%

Wednesday:
INDEX last +/- %
DAX 23,948.90 -0.2%
DAX future 23,869.00 -0.8%
XDAX 23,853.97 -0.4%
MDAX 30,631.70 +0.3%
TecDAX 3,912.54 -0.3%
SDAX 17,141.42 +0.4%
Euro Stoxx 50 5,393.15 -0.4%
Stoxx 50 4,571.24 -0.3%
Dow Jones 42,865.77 -0.0%
S&P 500 6,022.24 -0.3%
Nasdaq Composite 19,615.88 -0.5%

FINANCIAL MARKETS

EUROPE

Outlook: Consolidation on the German stock market is expected to expand on Thursday. "The overweighting of Europe is obviously being reduced somewhat," said one trader. Profit-taking is particularly attractive for investors in the dollar zone due to the high currency gains. The market is also continuing to wait and see whether a trade agreement will also be reached between the EU and the US. Tensions in the Middle East are also weighing on sentiment, even though oil prices are currently recovering somewhat after the previous day's upward surge. "The chances of a peaceful solution to the dispute over Iran's nuclear program are declining," said the trader. After the rally that began in April, the situation remains overbought from a medium-term perspective. Therefore, even good data such as Wednesday's US inflation data tends to be used for profit-taking. This applies especially to the favorites of the recent bullish waves. "If inflation remains low, the medium-term picture on the stock markets will also remain positive," said the market participant.

Review: The news situation was generally described as positive, but at the same time, partly unclear. The positive news that the US and China had reached a framework agreement in London was followed later in the day by comments from US President Trump that caused more confusion than clarity. Trump spoke of tariffs of 55 percent for China and only 10 percent for the US. Market participants couldn't quite make sense of this. Details of the framework agreement had already been lacking beforehand, which is why stocks as a whole reacted little. Apparently, however, China is once again facilitating access to rare earths, while in return the US is easing restrictions on chip exports to China. US consumer prices for May were also noted positively, fueling speculation in the US that interest rate cuts might occur, but they failed to provide any boost – especially since the reaction on the US stock markets was also rather muted. The Stoxx sub-index of retail stocks declined, losing 1.8 percent. The 4.4 percent decline at fashion group Inditex weighed on this. Zara's parent company had presented quarterly figures that showed a slowdown in growth as a result of the global trade disputes. Sales missed analysts' expectations. The share price of competitor H&M fell 2 percent.

DAX/MDAX/SDAX/TECDAX

A narrow hold – Bayer gained 3.8 percent and was a DAX winner. Kepler and HSBC raised their price target and also upgraded the stock to "buy." Siltronic and Aixtron benefited from a strong performance by the US semiconductor index SOX, which received a boost from good figures from Taiwanese chipmaker TSMC. Siltronic gained 8.3 percent and Aixtron 7.3 percent. Suss Microtec gained 0.8 percent. Defense stocks were repurchased after profit-taking the day before. Rheinmetall recovered by 2.9 percent. They had fallen by almost 6 percent the day before. According to observers, this was also supported by the fact that company executives had bought shares after the recent price setback. Hensoldt rose by 2.3 percent. Renk recovered by 3.5 percent. They had fallen by almost 12 percent the day before following a downgrade by Bank of America.

XETRA AFTER-MARKET

A fifth-row announcement provided the only tradable news. Cliq Digital traded 9 percent higher at Lang & Schwarz, trading at €5.31. Major shareholder Dylan Media plans to launch a public partial buyback offer for up to 2,060,000 shares at a price of €6.06 per share at the annual general meeting.

USA - STOCKS

Slightly lighter - Neither favorable inflation data nor an agreement in the trade dispute between the US and China provided lasting support for Wall Street. Traders instead spoke of disillusionment with the trade agreement between the world's two largest economies. According to negotiators, the result was a framework to get the agreement reached in May back on track. However, market observers feared a vague framework that would hardly go beyond the Geneva Agreement. And that agreement didn't last long. Another source of disappointment was China's apparent reservation of the right to tighten the easing of rare earth exports again. Another negative reaction was the US appeals court's upholding of Trump's reciprocal tariffs pending final resolution. Meta fell 1.2 percent. According to sources, the company is in advanced talks to invest around $14 billion in Scale AI and hire the startup's CEO. Lockheed Martin lost 4.2 percent. According to a report, the US Air Force is ordering significantly fewer F-35 fighter jets than planned for 2024.

USA - BONDS

The yield on ten-year US Treasury bonds fell by 6 basis points to 4.42 percent. US consumer prices rose slightly less than expected in May. This fueled speculation about interest rate cuts. Yields fell to daily lows amid strong demand at an auction for ten-year bonds. Traders spoke of another litmus test for confidence in US bonds.

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June 12, 2025 01:37 ET (05:37 GMT)

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