logo
Morning Bid: Europe Inc braces for pain from a sturdy euro

Morning Bid: Europe Inc braces for pain from a sturdy euro

Reuters2 days ago
A look at the day ahead in European and global markets from Ankur Banerjee
The incredible rise of the euro this year is sure to play a part in Europe Inc's performance as a steady but unspectacular start to the earnings season kicks up a notch with results due from the region's largest software maker SAP (SAPG.DE), opens new tab.
While tariff uncertainties linger ahead of an August 1 deadline, investors are pinning their hopes on resilient corporate earnings from Wall Street and European bellwethers to keep stocks and sentiment aloft.
Investors will parse through quarterly results for any clues on the impact trade uncertainty has had on profitability and consumer demand, with the earnings so far described by RBC Capital Markets as "fine but not fabulous".
SAP, which has been riding a boom in demand for its cloud-based offerings spurred by artificial intelligence, will report later on Tuesday as will UniCredit (CRDI.MI), opens new tab and Julius Baer (BAER.S), opens new tab.
Focus will be on just how much the euro's rise has eaten into profits of the firms in the bloc's export-reliant economy after the single currency surged 9% in the April-June quarter.
The euro is up 13% so far in the year as investors looked for alternatives to U.S. assets and to lower their dollar exposure in the wake of U.S. President Donald Trump's erratic trade policies.
SAP had predicted back in April that for every 1 cent rise in the euro, its annual revenue could decline by around 30 million euros. The euro was last at $1.1688 compared to $1.1329 at the end of April.
Earnings from luxury behemoth LVMH (LVMH.PA), opens new tab and drugmaker Roche (ROG.S), opens new tab this week will also be of interest.
Tariffs and where they are headed remain on the agenda after diplomats said the EU is exploring wide-ranging "anti-coercion" measures which would let the bloc target U.S. services or curb access to public tenders in the absence of a deal.
Trump has threatened 30% duties on imports from Europe if no agreement is signed before the August 1 deadline.
Meanwhile, the 'will-he-won't-he' saga over Trump possibly firing Federal Reserve Chair Jerome Powell rumbles on.
U.S. Treasury Secretary Scott Bessent said on Monday the entire Federal Reserve needed to be examined as an institution and whether it had been successful, further exacerbating worries about the independence of the U.S. central bank.
Key developments that could influence markets on Tuesday:
Earnings: SAP, UniCredit, Julius Baer
Trying to keep up with the latest tariff news?
Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

ECB leaves interest rates unchanged as it assesses impact of Trump tariffs
ECB leaves interest rates unchanged as it assesses impact of Trump tariffs

BreakingNews.ie

time29 minutes ago

  • BreakingNews.ie

ECB leaves interest rates unchanged as it assesses impact of Trump tariffs

The European Central Bank has left interest rates unchanged as it waits to see how big a blow US President Donald Trump's tariffs will inflict on the economy before deciding whether to cut rates again. The bank's governing council announced on Thursday at its headquarters in Frankfurt that it would leave its benchmark deposit rate at 2%. Advertisement 'The economy has so far proven resilient overall in a challenging global environment,' said bank president Christine Lagarde at her post-decision news conference. 'At the same time, the environment remains exceptionally uncertain, especially because of trade disputes.' The ECB has already cut rates eight times since June of last year and Ms Lagarde said after the last policy meeting on June 5 that the central bank is 'getting to the end of a monetary policy cycle'. US President Donald Trump sent the EU a letter informing officials of a potential 30% tariff (Julia Demaree Nikhinson/AP) The monetary authority for the 20 countries that use the euro currency has been lowering rates to support growth after raising them in 2022-2023 to snuff out inflation caused by Russia's invasion of Ukraine and the rebound after the pandemic. Advertisement With the benchmark rate now at 2%, down from a record high of 4%, analysts think there could be one more rate cut coming, but only in September. The reason, say analysts: The ECB's policymakers simply do not know the outcome of talks between the EU's executive commission and the Trump administration. Mr Trump first set a 20% tariff for EU goods, then threatened 50% after expressing displeasure at the pace of talks, then sent the EU a letter informing officials of a potential 30% tariff. EU officials earlier held out hope of winning at least the 10% baseline that applies to almost all trade partners, and analysts think the actual rate may be lower than Mr Trump's tariff threats. The talks are up against an August 1 deadline, but earlier deadlines have slipped as the sides kept talking. Advertisement With signs of economic activity holding up reasonably well, the ECB can afford to wait and see what the outcome of trade negotiations will be. Higher tariffs, or import taxes, on European goods would mean sellers would have to either increase prices for US consumers – risking loss of market share – or swallow the added cost in terms of lower profits. In either case, higher tariffs would hurt export earnings for European firms and slow the economy, which would strengthen the case for another rate cut in September. The ECB's rate cuts have helped support economic activity by lowering the cost of credit for consumers and businesses to purchase goods. Higher rates have the opposite effect and are used to cool off inflation by reducing demand for goods. Advertisement Growth in the eurozone was relatively strong at 0.6% in the first quarter – though that was partly thanks to rushed shipments of goods trying to beat the tariffs. Inflation has fallen from double digits in late 2022 to 2% in June, in line with the ECB's target. A stronger euro, which lowers the price of imports, and softer global prices for oil have helped keep inflation moderate. The stronger euro, up 13% this year at 1.17 dollars, has attracted attention as a potential damper on growth and ECB vice president Luis de Guindos said any rapid moves over 1.20 dollars could be 'much more complicated'. But the ECB typically does not target the exchange rate, and the euro's rise is considered to be less the result of Europe's strength and more the result of a weaker dollar weighed down by investor uncertainty about the future path of inflation, growth and government debt in the US. Advertisement

Exact time you should schedule interview to get the job of your dreams revealed by scientists
Exact time you should schedule interview to get the job of your dreams revealed by scientists

The Sun

time29 minutes ago

  • The Sun

Exact time you should schedule interview to get the job of your dreams revealed by scientists

SCIENTISTS have revealed the exact time your should schedule a job interview to secure the job of your dreams. After studying over 100,000 oral exams at Italian universities, researchers identified a specific two-hour window when success rates were highest. Midday, between 11am and 1pm, appears to be the ideal time for interviews, while early morning and late afternoon sessions tend to be less promising. Professor Carmelo Vicario, director of the Cognitive Neuroscience lab at the University of Messina in Sicily, said: "Students were more likely to pass in late morning compared to early morning or late afternoon. "We believe this pattern could extend to job interviews or any evaluative process scheduled throughout the day." Professor Alessio Avenanti of the University of Bologna, a co-author of the study, said: "These findings have wide-ranging implications." The reasons behind this midday advantage are thought to involve biological rhythms. Candidates may perform better during this time, while assessors - whether examiners or interviewers - could feel sharper and even more generous after meal breaks or earlier sessions. Previous studies have highlighted similar patterns, including research showing judges are more likely to deliver lenient decisions after meal breaks than later in the day. The UK job market is highly competitive, with an average of 48.7 people applying for each job, according to recruitment software firm Tribepad. Despite this, employers typically only interview around six candidates per vacancy. This makes it essential to prepare thoroughly and stand out to secure your spot and succeed in the interview. Living wage working family react to the Spring Statement How else can I boost my chances? To improve your chances of success in a UK job interview, there are several strategies to consider beyond simply timing your interview well. Fortunately, the recruitment site has shared its top tips to help you prepare. Follow along so you can smash that next interview. Do your homework First, thoroughly research the company to avoid appearing unprepared, as nearly half of hiring managers are put off by candidates who lack knowledge about the organisation. Study the company's website, recent news, mission, and values. Plus, ensure you fully understand the role by reviewing the job description and preparing to align your skills and experience with the job requirements, as failing to do so is a common reason for interview failure. Prepare and practice Preparation and practice are key to building confidence. Anticipate common questions such as "Why do you want this job?" and "Why are you leaving your current role?" Use the STAR method (Situation, Task, Action, Result) to structure your answers to competency-based questions clearly and effectively. Practising your responses will help you deliver them with clarity and confidence during the interview. Master your communication Communication plays a crucial role in making a strong impression. Your body language should convey confidence, with good posture and consistent eye contact. Actively listen to the interviewer to ensure your answers are relevant and show genuine engagement. Speak clearly and remain calm, taking a moment to think before responding if needed. Engage in two-way conversation Engaging in a two-way conversation is another way to leave a positive impression. Prepare questions about the role, team dynamics, and company culture to demonstrate your interest. Avoid asking about salary or benefits during the initial interview. Using the interviewer's name during the conversation can help build rapport and create a more personal connection. Keep it professional Professionalism is essential throughout the process. Dress appropriately in smart business attire if you are unsure of the dress code. Arriving 10-15 minutes early shows punctuality, as being late is often seen as a red flag. And be polite to everyone you encounter, from the receptionist to the interviewer, as your conduct with others can influence the overall assessment. Consider following up Finally, consider following up after the interview with a thank-you note. While this is not a guaranteed way to secure the job, a personalised thank-you email or note can tip the scales in your favour if the decision is between two strong candidates. It demonstrates professionalism and reiterates your interest in the role. Tools to help you write your CV STRUGGLING to get your CV just right? Here are a few tools that can lend a hand: Resume Builder App: If formatting is a headache, this app offers 50+ templates to choose from. It's free to download and use, with optional premium features if you need them. Grammarly: Spotting every typo can be tricky, so run your CV through Grammarly to catch any spelling and grammar gremlins. Free to download for your desktop. Canva: Looking for eye-catching design? Canva provides a variety of customisable CV templates to help your application stand out. VisualCV: More than just a pretty face, VisualCV ensures your CV is both visually appealing and readable by the electronic systems used by some recruiters. Free to sign up.

Italy's MPS focused on Mediobanca deal, CEO says after UniCredit drops BPM bid
Italy's MPS focused on Mediobanca deal, CEO says after UniCredit drops BPM bid

Reuters

time29 minutes ago

  • Reuters

Italy's MPS focused on Mediobanca deal, CEO says after UniCredit drops BPM bid

MILAN, July 24 (Reuters) - Italy's Monte dei Paschi ( opens new tab is focused on its takeover offer for Mediobanca ( opens new tab, its chief executive said on Thursday, adding further deals would be something the state-backed bank could consider only in the future. In a television interview with Class CNBC, Monte dei Paschi (MPS) CEO Luigi Lovaglio was asked about the implications for MPS of UniCredit ( opens new tab ditching its buyout offer for Banco BPM ( opens new tab. Banco BPM acquired a stake in MPS in November, just before UniCredit's swoop. It has long been seen as the government's favourite merger partner for MPS. UniCredit's withdrawal has revived speculation about a BPM-MPS tie-up becoming a possibility. "We are focused on the Mediobanca deal," Lovaglio said when asked if he had spoken to Banco BPM CEO Giuseppe Castagna after UniCredit's decision to abandon the bid. Lovaglio reiterated his view that the combination with Mediobanca would give MPS a scale that would allow the Tuscan bank to take part in a second round of consolidation that Lovaglio sees taking place in a couple of years. "Once we close this deal we'll have excess capital which one can use either for a deal or to give it back to shareholders, we'll assess it then," he said. He also ruled out an improvement of the price of the Mediobanca bid. "The price offered is fair if you take into account the current valuation of the two companies and the fact that after the deal there will certainly be a major re-rating," Lovaglio said. He expressed confidence that take-up of the bid would reach the targeted threshold of 66.7%, even though MPS set the minimum threshold at 35%, which it considers sufficient to control the rival. Mediobanca this month renewed its opposition to the takeover offer, saying the price was "totally inadequate" and around a third lower than what the bank's board deemed fair.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store