Global week ahead: Banking bellwethers and a tariffs waiting game
Skyscrapers on the skyline from the offices of the European Central Bank in Frankfurt, Germany, on Monday, Nov. 25, 2024.
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Next week, the CNBC teams are back on the road – and it’s all about the banks and the ECB. From Frankfurt to Milan, and Paris to London, the financials are in focus.
Stoxx 600 earnings-per-share growth to turn positive year-on-year this quarter.
Much of that optimism is centered on the big banks, while other sectors like luxury, autos and energy have been plagued by earnings downgrades.
Unicredit kicks things off on Wednesday. The Italian banking giant will try to keep investors focused on the numbers, rather than its M&A ambitions. While its moves around Commerzbank have seen it increase its equity stake to 20%, Saxo Bank analysts highlight the uncertainty around its potential takeover of Banco BPM, after an Italian court blocked the move until further conditions are met. The stock is up over 50% so far this year, providing some cheer for CEO Andrea Orcel as he battles to keep his expansion plans on track.
French financial BNP Paribas — the euro zone’s largest lender by assets — reports earnings on Thursday.
Last quarter, the bank soared past expectations driven by performance at its investment bank, but revised its profitability target slightly lower.
On the same day, attention will turn to Frankfurt for Deutsche Bank’s latest set of numbers. The German lender logged its best profit in 14 years last quarter, benefiting from increased trading volumes around the market volatility. CEO Christian Sewing told CNBC in June that he sees an opportunity for Europe to invest more in its own defense sector as a key growth area.
How the EU is preparing to reach a tariff deal in Trump’s game of chicken
Investors will have until Sept. 11 to assess the impact, as the ECB breaks for the summer after this week’s meeting.
Inflation situation
In terms of the underlying economic conditions, Deutsche Bank warns that European inflation risks are “still being underestimated, with a remarkable complacency across key assets,” with the tariff impact yet to fully trickle through.
The bank’s macro strategist also told CNBC’s Squawk Box Europe that the Aug. 1 tariff deadline for negotiations between the U.S. and EU sets the stage for a late outcome to trigger a “very sharp market reaction.”
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