Europe open: Stocks flat amid US recession chatter, talk of rate cuts

Stocks on the Continent are treading water, with investors sitting on the sidelines despite upbeat quarterly updates from US tech heavyweights overnight and news of a 'dovish' turn by rate-setters in Sweden.

Giving their take on the situation facing investors, analysts at Barclays said: "equities continue to defy gravity and [S&P 500] just printed new highs, but investors stay on the sidelines. Bonds had more inflows than equities again month-to-date and high frequency exposure remains low.

"As the unfavourable spring/summer seasonality looms while RSI is stretched, positive earnings/activity surprises are needed for the bears to capitulate."

On the flip side, and among the markets current bugbears according to some analysts were the inverted US Treasury yield curve, with those at Rabobank saying the inversion between six-month US T-bills and five-year Treasury notes pointed to an economic recession in the States in 2020.

Against that backdrop, as of 1030 BST, the benchmark Stoxx 600 was edging down 0.16% to 390.34, alongside a 0.18% dip on the Cac-40 to 5,565.93, while the FTSE Mibtel was adding 0.08% to 21,743.92.

In parallel, euro/dollar was off by 0.15% at 1.1374 and near its weakest level since mid-2017 and front month Brent crude oil futures were rising by 1.19% to $75.47 a barrel on the ICE, reversing the prior day's declines.

Regarding the latter, in a research note sent to clients on 23 April, analysts at Morgan Stanley revised their Brent oil price projection for the back half of 2019 to $75-80 a barrel, predicting a slightly greater deficit in the market after Washington opted to tighten the screws on Tehran by not extending waivers on US sanctions for countries trading with Iran on oil.

Surprising markets and sparking a rout in the country's currency, policymakers at Sweden's Riksbank pushed back expectations for a first interest rate hike from mid-2019, possibly to as late as the start of 2020.

Referring to similar dovish statements out of the Bank of Japan and Bank of Canada, analysts at TD Securities said: "The G10 central bank race to the bottom continues with the Riksbank now the third central bank to turn more dovish over the last 24 hours."

On the corporate front meanwhile, shares of Deutsche Bank were bounding higher after announcing it had broken off merger talks with German peer Commerzbank.

Going the other way, stock in Nokia crumbled after the company sprang a nasty surprise on unsuspecting investors, notifying of an unexpected quarterly loss and saying it was now under "significant pressure on execution in the second half".