Jefferies EMEA Market Minutes

THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: {http://www.jefferies.com/globaljefferiesllc}

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THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: {http://www.jefferies.com/globaljefferiesllc}

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• At a glance SXXP ~-1%, but when you take out the DAX which is -2% on SAP cutting guidance then Europe is actually +1.5% • US mkts in fact rallied into close on Friday, futures sell off actually started in Asia as China underperformed hitting sentiment on news that China had tested 3mln people in Xinjiang post news of a cluster of cases there, HK was closed • GBP bit stronger vs Euro as more developments on Brexit - negotiations extended by 3 days with Barnier extending his time in London to try to complete the deal • In terms of sectors Very defensive skew this morning • SAP which opened -20% knocking $25bln of the DAX... After SAP cut guidance saying goals for cloud business delayed by 1-2 years. • UK BANKS outperforming post Times spec. UK regulator said to be considering allowing banks to resume dividends next year • Big earnings focus for sector: HSBC report tomorrow. Standard Chartered & Lloyds report on Thurs. Natwest on Friday • M&A spec this morning o Cellnex +2.5% said to be in talks on buying CK Hutch tower for $10.7b o Coca-Cola Europe (CCEP NA) agrees the buy Coca-Cola Amatil in Australia for $6.6b, bidding a 19% premium

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• Europe is +70bps and on good volumes +30% • More Erns to digest this morning.. • The S&P defended its support at 3420 • We had a flurry of PMI data out this morning supporting the strength in Europe... Much of the same as last month, with manufacturing outperforming services, vitally though Job losses eased somewhat but employment still on a downward trend. • FTSE +1.4% is outperforming getting a boost from the UK BANKS +3% - as BARC +7.5% after blow out 3Q beat: ADJ PRETAX £1.22B, cons. 650.5M... HSBA +4.5% and LLOY +5.6%... • McCarthy & Stone after +40% 115p / share cash offer by Lone Star • KER -3% - MONC OR +1.5% Autos +1.5 also strong this morning on Erns.. parts a focus --- Michelin +3% beat and raise. Athought Faurecia now UNCH having been up 2.5%

THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: {http://www.jefferies.com/globaljefferiesllc}

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• Europe is -50bps having been -1%.. • leg lower overnight after US intelligence officials warned Russia and Iran have attempted to interfere in next months US election... • Another Earnings heavy day with single stock moves ranging from +10% to -8%.. Still seeing travel and arrive theme as the majority now are down on the day. • Speaking of earnings.. Tesla reported after hours in the US is +5% pre market after broad and balanced 3Q beat. FCF v strong despite capex increasing. FY delivery target of 500k kept, with acknowledgement of the challenges... • In terms of sectors.. Autos +2% from the lows… Pharma, Tech and Energy all -1% are worst with 'Travel & Leisure' relative outperformer..

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Recorded 10:15 GMT / 5:15 Eastern Time

Europe -1.5% -- function of US Fiscal saga (NTY downbeat article out later yesterday) and Netflix -6% on slowing net adds hurting growth
Value holding up well but I think its just because people don't own it, there is real selling in the market today, SXXP has broken down thru 200 dma
Tesla reports after the close as well which will be super interesting
Currencies a feature, GBP up best part of a percent vs the $ on constructive comments from Barnier on brexit deal -- broader $ weakness hurting European indices with Euro bit stronger as well

THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: www.jefferies.com/globaljefferiesllc

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• Europe +half a percent this morning but this is not necessarily an accurate representation of where we should be given the trading halt we are experiencing due to a technical fault • Euronext is having street wide issues • France, Portugal, Belgium, Netherlands & Ireland markets are all halted. • S&P futs which are unch from Europeans close Friday, somewhat recovered from the weakness after the options expiry in the US and Fridays tech weakness.. • Today we have o Brexit saga heads to the House of Lords today where there is some speculation they may amend aspects of the proposal to soothe the EU o OPEC+ meeting stars today, Putin and Mohammed Bin Salman have been in dialog in recent days leading into meeting o Today and tomorrow, we should see a lot of headlines around the fiscal negotiations in the US • Airlines +1.3% - The industry is working to set up testing system to replace quarantine to help revive the industry

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• Risk sentiment on a back-foot after hopes of an immediate fiscal deal have quite quickly diminished. • Overnight in Asia the region was butting up against resistance level but failed to break through. • STERLING weakened initially & FTSE exporters outperformed, as expectations of little developments in BREXIT talke but then turnaround was post BREXIT headlines. UK signals it won't walk away from EU trade talks immediately • In terms of factors; contrasting with what we saw in the US overnight Value is outperforming +50bps • COVESTRO CAP INCREASE: Overnight raised €447m, priced at €43.85, -0.9% -- proceeds to be used to partially re-finance the purchase of announced acquisition of resins biz from DSM • M&A spex in US Oils aft hrs ConocoPhilips in talks to acq. Concho Resources ($8b mkt cap). Note: Conoco has been dropping hints about a potential M&A deal for months

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Recorded 11am Uk time / 6am GMT

Europe trading +40bps - S&P futs slight outperfomer
Weekend press busy with opinion pieces on US Fiscal spend, virus narrative, brexit and UK lockdowns - we give our view and market thoughts
China and HK outperform off the back of weaker CNY with PBoC changing policy rules making it less expensive to short the CNY
M&A headlines in focus, KPN +7% in the telcos on talk of PE interest
We u/g SocGen to buy and the call fits with our overall bullish view of dividends returning to the Euro banks
Finally out virtual UK Industrials conference kicks off tomorrow - speakers include Rolls Royce, Ashtead Balfour Beatty, G4S, Intertek, Mitie and Bodycote

THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: www.jefferies.com/globaljefferiesllc

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• Markets helped by news Pelosi and Mnuchin have restarted stim talks and that the administration is potentially open to a larger deal • Equity positioning is light (our index shows positioning at +1.2 on a scale of -10 to +10), thus we could see a continuation of positive sentiment into the elections. • overnight Asia was small down with the exception SHCOMP +2% playing catch up after Globen week holiday • New this morning of "Donald Trump planning a rally tomorrow — supposedly 10 days since his diagnosis • In terms of Sectors; Miners +2% outperforming as copper, Gold and Silver all + >1% as $ fades further this morning • Pharmam and Retail slightly outperforming +50% After some co's raised guidance in the sectors including Novo Nordisk (+3%, ADR), Zalando (+7%), GN, Global Fashion Group (+9%) all raised guidance

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• Positive sentiment fueled by optimism that American lawmakers will reach a stimulus deal. • Also driving Positive sentiment is Biden’s increasing lead in the polls is seen as reducing the chances of a close, and potentially messy election outcome. However after the Harris/Pence debate yesterday a CNN poll found that Harris won the debate 59% to 38%.. • In terms of Sectors... Its Banks and Travel & Leisure both leading • Miners and Basic materials also underperforming despite slight uptick in Gold and silver on a weaker $ • focus today also on UK RETAIL/CONSUMER report & fade theme for a 2nd day running...this time IMPERIAL BRANDS opened +3% now unch. on day.

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• Europe is Unch on the day, outperforming the S&P futs which are -70bps from Eu close • overnight Asia remained resilient. • Volatility indices...especially the European ones...V2X is printing a buy signal today. • consolidation in the banks after the significant move we saw yesterday • Bev +50bps helped by DGE/ABI/HEIA/RI all +1-2% after our note this morning • ABI BB ---- top pick in beverage research this morning... Testing 200dma to upside today • Tonight is Pence vs Harris -- I think will be a pivotal moment for election

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• This morning the European core rates did not follow the steepening of the US curve. Bund yields moved higher but the curve failed to steepen. • DBK +4% on the tape telling us once again that trading has remained strong • GLE also +4% were out there not so long ago indicating that impairments are trending towards the lower-end of the range & capital to the higher-end. Starting to see how this Q3 could combine with all of the M&A noise/action to lift the sector off the floor. • Telcos +1% are sustaining their rally after yesterday’s outperformance.. Thus supporting the continuation of the Value outperformance. • At the bottom of the table are the tech and Pharma names both -1% - Tech underperformance comes as A house panel is investigating competition in the tech sector looking at reforms to block co.'s like Amazon/Apple from owning marketplaces and selling their own products on them • Placing overnight - Kering sold $800m of its stake in Puma, looks like 4.6% discount at €74.50- they will retain 9.8% stake after placing - PUM is trading above placing price currently at 76.62 • Today, we have Powell (1540 London time) and Lane (1630 London time) addressing the NABE conference.

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urope is trading +60bps mirroring the move we saw in the S&P futures from Eu close Friday... • The market seems to be paying attention (for now) to 'optimism' on Trumps health • Brexit as negotiators begin on today for a two-week period of talks • GBP moving higher which is causing the FTSE to underperform. • Bonds generally softer this morning & US 10 year yield testing last week's highs. • A lot of M&A to digest this morning • In terms of Sectors not a clear risk on Skew more of a value trade as Banks +2%, Travel & LEISURE +2% and Autos +1.6%. Miners -30bps are the only sector down on the day. • Autos Positive read across to Volvo +4% / Daimler - Sept net orders for heavy vehicles totaled 31,100 units, up 145% YoY, and +60% m/m, for SAAR of ~417K. Order activity accelerated in Sept as trucking companies have become more confident in the rally • This week we see a number of Fed and ECB speakers, including Lagarde and Powell tomorrow and Lagarde also speaking on Wednesday.

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Recorded 10am UK time - 5am EST

Europe trading -1%, off the low but lack of conviction buying the dip
Concern among Fed members that US Fiscal support will not come has hit growth names
FT highlighting Interactive Brokers are talking about increasing margin requirements for retail investors into the election ...

=> Result of this surely has to be higher volatility over next few weeks at least!

Sector wise in Europe nothing too dramatic to report. Retail underperforms on vanilla profit taking after recent outperformance and banks and aerospace drifting on the continued lack of real buyer and incremental negative newsflow

THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: www.jefferies.com/globaljefferiesllc

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Recorded 10am UK time / 5am EST

Europe +1.5% - impressive bounce back but feels short covering led
Value bouncing back well with Banks and Travel sectors +3%
Healthcare in focus with Genmab -12% - we discuss why we think its overdone
Tesla traded $3b aft hrs - i've not seen a stock trade that much value in recent months... Should that hit Nasdaq futs more? We discuss recent ETF trends and rotation into single stock WFH proxies
Retail in focus after Nike +12% aft hrs - China not as good as US/Europe but not enough evidence here to suggest luxury and China proxies should be sold relative
Lots of EU macro data out - long and short of it is it supports the uncertainly the ECB has been presenting and therefore supports the buy the dip philosophy predicated on CB backstops...

THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: www.jefferies.com/globaljefferiesllc

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Recorded 10am Uk time / 5am EST

Heavy risk off day in Europe - 2.5x Standard Deviation move to the downside. S&P futs -2%, Dax/Estoxx futs -3%
Virus narrative worsening but banks also hit very hard on compliance issues at HSBC, Standard Chartered and ING
We discuss the receent pick up in Institutional appetite for Europe ahead of earnings but question how this mixes with evolving lockdown measures and impact on markets
Europe (SXXP) trading right at lower end of 3 month channel range, is there a lack of protection in the market post expiry Friday?

THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: www.jefferies.com/globaljefferiesllc

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• Volumes 1.5x that of normal due to quadruple witching today. • Clear risk off skew in terms of sectors as Tech +1%, as the semis get a boost, Pharma +70bps and Utils all relative outperformers and sell off in the Autos -1% Banks -1.5% and Travel and Leisure -3%. • UK -50bps is under performing as second UK lockdown looking increasingly likely • Value factor basket also worst on the day -70bps.. Net Momo is +2%!! • UK Retail sales came in slightly better than expected this morning • M&A busy…

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Value underperforming again

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Recorded 11am Uk time, 6am Eastern Time

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• S&P futs -1% from Europe • Mixed session in Asia, HSI and SHCOMP closed higher as tech sentiment turned +ve • Senate failed to move ahead with the $500bn stimulus plan in a 52-47 vote • focus on deals this morning as Next Private agreed to buy Altice +25% after the co was valued at 4.9 billion euros • KBX -8% €1bn placing in Knorr(KBX GY) overnight stock. Was placed at 8% discount and stock has been trading around this price for most of the morning. • and Aryzta (arzeta) +11% say they are in advanced talks with Elliott Management about a potential takeover. • Miners are outperforming +1% .. sector +>5% over last 5 sessions

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• SXXP +80bps, so outperforming the S&P futures which are Unch from Europe’s close yesterday • $1t wiped off 6 largest US tech co.'s in last few days • Astrazeneca pauses vaccine trial after a participant fell ill • The economic data and earnings calendar is pretty quiet in Europe, with attention likely to turn to the European Central Bank meeting coming up on Thursday

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• Market took a leg lower as TSLA -10% pre market dragging Nasdaq Future down 1% • Sterling faded further 1% against the EUR after continued Brexit concerns. • UK Johnson believes the UK-EU withdrawal agreement is legally ambiguous, would leave Northern Ireland isolated from the rest of the UK.

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• US and Canada markets closed today. • Overnight is Asia - markets were mostly lower, driven by Tech weakness impacted by SMIC -20% on possibility it may be blacklisted by Trump • Johnson expected to warn the EU that if there is no breakthrough Brexit deal by Oct 15th • Virgin Atlantic is to cut a further 1,150 jobs and put another 600 cabin crew on extended furlough beyond October,l • Last week’s US technology rout showed European stocks might be relatively resilient to a prolonged correction, and for good reason.

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Value basket rally, central bank and govt stimulus increasing. More macro focus later with non farm payrolls to come

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Big focus on $ and more govt stimulus.

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• SXXP +60bps on volumes half that of the 20 day average.. • UK markets being closed due to a bank holiday • MSCI rebal today (ex UK) --- Apple & Telsa stock splits come into effect today • In terms of sectors: a risk on skew with Autos, Oil & Gas & Miners all +>1% and telcos and travel names only ones in the red • Suez +17% after Veolia Environnement offered 2.9 billion euros for a 29.9% stake in the company. • Phillips -70bps having been cutting guidance

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• Europe +30bps in line with the move in the S&P futs from Europe’s close yday • UK playing catch up is dragging the market down ->1%... • volumes +65% vs 20 day moving average • METALS: Glencore +3% as $ makes new lows it's no surprise to see COPPER finally breaking out above the $3/lb resistance that has proven so stubborn over the Summer • Euro Area (51.7): unchanged from the flash estimate, output and new orders rose at marked rates. Despite this, manufacturers continued to make sharp cuts in employment, with job losses most acute in Germany

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• SXXP +60bps on volumes half that of the 20 day average.. • UK markets being closed due to a bank holiday • MSCI rebal today (ex UK) --- Apple & Telsa stock splits come into effect today • In terms of sectors: a risk on skew with Autos, Oil & Gas & Miners all +>1% and telcos and travel names only ones in the red • Suez +17% after Veolia Environnement offered 2.9 billion euros for a 29.9% stake in the company. • Phillips -70bps having been cutting guidance

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• SXXP -50bps, underperforming move in S&P futures by >1%... • Nasdaq hit record high for 4th day running as Tesla +6% & Netflix +10 • EU Banks -2% worst performing sector, tracking the move in German 10yr yields • Powell’s speech at Jackson Hole @2.10pm UK Time. • Travel & Leisure is continuing to outperform as Italy and France joined Spain in ruling out imposing new nationwide lockdowns despite an upsurge in coronavirus cases. • RR/ calling -8%... CFO leaving • ECB’s Lane speaking at 16:50 London time AND We get the second estimate of US GDP and the initial jobless claims.

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• Positive risk sentiment following Germany extending extends wage support program to end of 2021 which saw steepening of yields with 10Y Bunds selling off by over 7bp. Risk on rotation evident in equity mkt too as Telecoms, Utils worst performing. • Also some positivity on the US/China del front as China was reported to be set to buy a record amount of American soybeans after reaffirming its commitment to the phase-one deal with the US earlier this week. ove to restore friendly Europe Ties • Tech outperforming +1% • Telecoms underperforming Hoever.. Telecom Italia +4% on decent volume post press spec. that Italy Unlikely to Block Telecom Italia Deal With KKR re: Networks sales. • Energy only small up is underperforming despite crude maintaining the $45 price after more headlines around Hurricane Laura hitting production. • PROVIDENT FINANCIAL +16% there were some +ve comments on Con call..competitive landscape --- COVID will expand their addressable market place; CEO talking up balance sheet strength • Ambu -14% in Copenhagen after the resuscitator-maker lowered its full-year growth and profit forecasts. • Elekta +15% loads of incoming all from clients who think this rally is too much, that said 1Q order intake was more resilient than expected, EBITA beat cons by +19% on favourable sales mix and solid cost control however market seems to be blind to the fact that the co expects 2Q to still be impacted by COVID and is not issuing FY guidance. • Aroundtown S.A. rose as much as 3.9% in Frankfurt after reporting a jump in half-year revenue. • FERRAGAMO(SFER IM) +6% post Jefferies u/g to BUY this am p/t 15 fm 11 • Macro French PM Castex commented on radio France to unveil economic stimulus plan on 3-Sep: further hints about the contents of its €100B plan to boost the economy with full details of the stimulus package to be announced on 3-Sep

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Risk on trade across asset classes

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• SXXP +50bps somewhat inline S&P futs.. And volumes -30bps still low as to be expected mid-August Friday This mixed session in Asia. Korea rebounding from Thursday's sell-off as China and Taiwan markets outperform on tech strength. • One focus on China's Commerce Ministry said that Beijing and Washington have agreed to hold a call soon to discuss the progress of their phase one trade agreement. HOWEVER Reuters reported Trump administration on Thursday declined to acknowledge any plans to meet with China over the Phase 1 trade deal so will be keeping an eye out for more headlines revolving this.. • From a virus standpoint there has been Headlines that Pfizer’s vaccine is on track for a regulatory review as early as October helped spurred risk-on mood across asset classes • Futures sold off shortly after the open on disappointing French PMI data, bounce back as Germany: Manufacturing was stronger in August than July, but services dragged the composite lower. • key takeaway from the surveys is that employment continues to weigh on demand, with job losses in both Germany and France still notable. • France: August readings were weaker than July across the board, led by manufacturing, which contracted for the first time since May. • £ was better early as UK PMI 60.3 much compared to the euro area 51.6 however gains reversed watch Sterling vs. Euro...hardly a surprise but EU BARNIER SAYS AGREEMENT AT THIS STAGE WITH UK SEEMS UNLIKELY • In terms of Sectors.. another risk off lead session with the Banks Autos and Energy remaining unloved the only three sectors down on the day. Value basket underperforming again today -40bps. • Travel and Leisure +best part of 2% as GVC +4% after Jef analyst raising forecasts, so shout out if you want to see that note. ACOR +3%, IHG +2% lots of broker reit buy in these after yesterday M&A spec. • Client focus heavily on ADYEN -4% after placing $850m overnight so the stck is currently trading at around the placing price of 1365. Overnight Jeff reit buy in stock p/t 1495

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Risk off move on light volumes led by cautious FOMC comments overnight

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• Its Wednesday 19th August and here is what we are seeing so far.. • SXXP +10bps which is inline with the move in the S&P Futs from Europes close. • a lot of focus on the S&P 500 Index after closing at a record high yesterday after a tech rally and strong housing data • Sell off in China as the market is finally reacting to yet more tensions with the US.. I have postponed trade talks with China; I don't want to talk to China right now - Asked if he will pull out of China trade deal, he says, "We'll see" • Hang Seng closed due to a typhoon. • In terms of Sectors, not actually a massive spread in the moves... Food and Beverages are best today +50bps, whilst Oil& Gas are the worst but only -30bps.. • Food and Beverages are in focus today for a few reasons. • CARLSBERG: +2% RBREW guidance VERY positive for Carlsberg and shows guidance to be wildly conservative. RBREW talking strong August on good weather. Beat & Raise coming Q3 • Amazon and morrisons announce ‘morrisons on amazon’ for prime • RWE announced a surprise 10% equity raise last night and Set the Price of EUR32.55 a Share.. The stock is currently trading at 32.90, this is helping give a boost to EON +1% • Big net foreign buying of euro area equities in June €65.5bn

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• SXXP is unch having briefly touched -~1%, second day in a row with Stocks 600 lagging S&P futs early on before returning to Unch on the day to match the move in the S&P futs from Europe’s close • US Commerce Department has announced further curbs on Huawei. Korea underperforms -2.6% as govt mulling to upgrade social distancing level to stage 3 • USD continued weakness sending ripples, with the EUR trading through 1.19, the highest it has been since May 2018. - GOLD spiking on the back of this move, trading back above $2000. • In terms of sectors; Travel and Leisure +80bps is outperforming seems like the sector has had a bit of a rebound after yesterday’s sell off. • RETAILERS in focus today and so far we have seen a 6% turnaround in MARKS & SPENCER now -3% on day. • FOOD: Kantar data, 4 weeks to 09-Aug-2020Winners: MRW (driven by online perf +118% vs industry +88%) and TSCO Losers: SBRY (vs a tougher comp than others)+ ASDA + OCDO (online growing 49.6%) Mkt is also awaiting WALMART earning due to premkt in US at 12pm UK time, Ahold is biggest read across.

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• SXXP +10bps, in line with the move in the S&P futures from Europe’s close on Friday. • SXXP volumes are half that of normal. • Overnight in Asia markets are continuing to be mixed... China significantly outperformed Shanghai +2.4%(biggest 1day move in a month) after China adds Y700bn for 1yr funding via medium term lending. And Japan underperforms as Nikkei -0.7% as 1Q GDP missed -27.8% cons. -26.9%. • The US-China trade deal compliance meeting postponed due to scheduling conflicts • US economic stimulus bill hasn’t made much progress and differences still remain between the Democrats and the Republicans. • In terms of Sectors, no real risk direction... The Miners +160bps outperforming • UK House builders +70bps as the UK housing market saw a surge in activity last month • Pharma M&A... Sanofi +50bps acquires Principia Biopharma for $100 per share in cash, representing an aggregate equity value of approximately $3.68B • TUI cancels all tours to Spain on advice of German govt. • CNN opinion poll (Aug 12-15) showed Biden's lead over Trump significantly narrowed since June

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• SXXP -150bps, underperforming the S&P futures which are -60bps from Europes close yesterday. • Overnight in Asia was mixed China closed +1% outperformed despite weaker than expected Industrial Production data for the rejoin, coming in at +4.8% vs +5.2% exp; and esp weak Retail Sales -1.1% vs +0.1% exp. • VIX is creeping back up this morning. • Quiagen +4% after shareholder reject takeover bid from Thermo Fisher causing the stock to rally. • Banks -2.5% are weaker as the Yeilds have come off now, although interesting to not that overnight the US Banks saw through the rally in the yields

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• Its Thursday 13th August and here is what we are seeing so far today... • The SXXP -20bps this morning ending four-day winning streak and volume are lower too.. The move is inline with the 20bps fade in the S&P futures from Europes close yesterday • The US announced new US tariffs aimed at goods from Germany and France • Two patients in China that recovered months ago tested positive for Covid-19, raising concern about the the virus’s ability to linger and reappear in people who it previously infected. • In terms of sectors, Cyclical industries including miners and oil & gas are underperforming while the Telcos are outperforming helped by a beat in DTE as the co raised its forecasts. • Wirecard AG: Deutsche Boerse is replacing the co from DAX Index even before the regular quarterly review. Wirecard’s replacement will be announced Wednesday with the change taking effect Aug. 24. => Delivery Hero most likely candidate to enter the benchmark. • Carlsberg -5% after cautious outlook and bearish conference call our spec sales however is flagging that their guidance is too conservative. • also don’t forget we have the Carlb CEO on Monday. • 1.30pm US Import/Export Price Index, Jobless Claims

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• SXXP +30bps, but outperforming the S&P which is -40bps (despite 80bps rally early this morning) from Europe's close yesterday. • The FTSE100 +50bps is outperforming, led by the Banks as HSBA +3% • Telco’s +1.4% are also are in focus today after some M&A in the space... Liberty Global made a CHF110 offer for SUNRISE, the stock is trading at 108.6 as of 9.30 so that is +>25%... • Gold +3%turnaround in gold this morning finding support below $1,900 an ounce. • UK GDP this morning was a BEAT June 8.7% MoM cons 8%. 2Q -20.4% cons -20.7%;

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Recorded 10:15am GMT / 5:15 EST

Europe +2.5% - solid rally - Autos, Banks, Airlines all up over 3% so value screaming higher
Other asset classes reacting to equities for once mirroring risk on move
US backdrop set the tone with value bounce (airline data and yield curve steepening features) and its accelerating off decent auto sales data in China overnight + German ZEW data just now VERY good
Liquidity challenging today, volumes +10-15% but considering the extent of the move this is not enough. Sellers are notably lacking as we remain better to buy with covering a feature

THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: www.jefferies.com/globaljefferiesllc

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Recorded 10:15 am GMT / 5:15am EST

Markets broadly unch, off the highs following Trump signing exec order on Fiscal relief
US / China throwing stones with sanctions back and forth which led to a small pullback in Equities this morning

=> There has also been some any Democracy arrests in HK of note

Volumes -10-20% paints the picture well - summer lull and single stock news void
Saudi Aramco earnings out, nothing too revealing but outlook on demand sees crude trade +1.5%
Tech underperforming -1.3% but rest of sectors in relatively tight range, bank trying to rally +1.3% as function of value rally. Lets see if it is sustained when the US market opens...

THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: www.jefferies.com/globaljefferiesllc

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• SXXP -50bps Underperforming move in S&P futures. FTSE100 -1.5% is significantly underperforming and early on the DAX was >+1% but has now reversed all gains after failing at the 12,800 gap and EStoxx at 3300 • Overnight Asia wad generally weak, with the exception of China +20bps and Australia +70bps on commods strength. • Yoyoing sentiment with respect to US/China state of affairs as US DoS expands "Clean Network" targeting Chinese tech co.'s (notable mentions Huawei, Baidu, Tencent, Alibaba). • bounce in DXY after weakness yesterday, felt very much CNY led yesterday • In terms of sectors, not much of a direction in terms of risk sentiment but more driven by earnings/ single stock moves • Industrials +30bps are only sector in the green as SIE GY +3% after solid set of numbers across the board, revs 6% ahead, adj EBITDA 82% ahead for the quarter, FcF strong, no guidance given. • EUROFINS jumps +15% after printing strong performance across the board. • In the Miners it is Glencore -4% after scrapping its 2020 dividend • BoE: No change to rates which was no surprise.

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• SXXP +80bps, inline with the move in the SXP Futures also +80bps, focused on US-China trade discussions and American lawmakers making progress on an economic aid package • Asia relatively calm - not too many large movers. Shine taken off the rally in China who closed just +20 bps as Shadow PMI serv data decent miss in China 54.1 cons 58 (and prev 58.4). • HK +60bps, outperformed as with semis rally on reports China is to offer industry tax incentives • Eruope saw through slight wobble after Few PMI services disappointments but expectations were highg and the market saw through it.. EU printed 54.7 cons 55.1 and Germany and UK very slight misses too • The dollar is weaker today. • A DAX-heavy morning on the earnings front: o COMMERZBANK +4% BEAT 2 net income €220M cons €95M; Revenue €2.27B cons €2.26B; EBIT €205M cons €151M o DTE POST +3% Q2 BETTER - net €525m, revs €15.96bn, EBIT €912.m vs 7th July guide ~€890m ... +2% o DIALOG SEMI +5% Sees 3Q revenue $340m to $380m, est $333.2m. 2Q revenue $302.3m, estimate $298.3m. 2Q adjusted operating profit $62.4m, -24% y/y. 2Q adjusted Ebitda $76.4m, -23% y/y 2Q adjusted gross margin 50.6%. Sees 3Q underlying gross margin to be broadly in line with Q2 2020. o VONOVIA +3.5% 1H FFO €676.3m, net €1.62bn and reiterates FY targets o Data today : 8:15am Spain market PMI, 8:45am Italy Markit PMI, 8:50am France market PMI, 8:55am Germany Markit PMI, 9:30am UK Markit PMI, 1:30pm US ADP data, 3pm US ISM o ALLIANZ unchg after BEAT Q2 net income €1.53B cons €1.48B; Operating profit €2.57B cons €2.43B o BMW -3% reported its first loss since 2009... And miss vs cons. • Food & Bev -30bps which is still being weighed on by DGE disappointment yesterday... That stock is -3%.. • Airlines are +6%, fantastic call from Danny Kirsche.. • As commodity prices are up across the board... Oil climbed to a five-month high, topping $45 a barrel after US industry data showed a decline in the nation’s stockpiles. • Gold continued its rally even after passing record $2,000

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• Europe is trading -30bps this morning, mostly inline with the move in the S&P futures -20bps • In the US overnight it was large cap tech that outperformed vs Commods lagging. – Very different picture in Europe. • In fact in the US the Nasdaq 100 reached record highs as did Apple and Microsoft also gained as it made headway towards a deal for US operations of TikTok • Asia was strong overnight HK +2%m, as Tech was better in the region. Also helped by a slowdown in the rate of coronavirus infections in Hong Kong. And sentiment was also helped in the US as California, Georgia report smallest rise in cases in nearly a month. • In terms of sectors, there is a definite Risk on Skew, Oil & Gas +2% as BP/ +>7% • EasyJet +10% after issuing 3Q Trading statement: The CEO said they have seen higher than expected level of demand with load factor of 84% in July" and bookings for the summer are better than expected. The company stated that they have decided to expand our schedule over 4Q to fly ~40% of capacity. • Value is a notable outperformer, +1.1% • DGE -7% after reported numbers this morning which were a miss across the boards - stock is trading -7%

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Recorded 10:30 am GMT / 5:30 EST

Europe marginally up on the day - Banks and Travel sector weak on newsflow so value factor basket under performers
Germany notable outperformer, +1% following decent PMI data (follows China overnight)
Healthcare in focus with Siemens Healthineers' $16b acquisition off Varian Medical
Fed speak focus today - lots of commentary expected later, note over the weekend Kashkari floated the idea of the US locking down again for 4-6 weeks...
UK virus strategy in focus with press at the weekend criticizing the pub reopening process suggesting it risks schools now not being able to open in September

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• Europe is +50bps, so only a modest recovery considering the >2% de-risking move we saw yesterday. • Focus on $ again as DXY hits 2yr lows, • Risk off evident in the Bond mkt overnight as US10yr yield continues lower 0.52% seeing similar moves in UK, German & Spain • €/$ We had argued before that a sustained rise above 1.20 would put rate cuts back on the agenda. • Just looking at Asia overnight, the region was pretty mixed, SHCOMP was the outperformer and closed +70bps after Slightly better than expected China July Mfg PMI at 51.1 vs 50.8 exp... But elsewhere NKY -~3% and HSI flat. • In the UK we are relocking down parts of Northern England • Just some data to be aware of this morning we had the French 2Q GDP -13.8% cons -15.2% so slight beet there, however Spain -18.5%, was worse than expected) and Italy -17.3% inline. • In the commodity space; Brent and Crude both +1% and Gold +1% too is headed for the biggest monthly gain in more than four years. • Tech +2.5% is outperforming on inflated volumes • Airlines -3%: IAG -7% says it will take until at least 2023 for demand to recover to 2019 levels and proposed a capital raise up to EUR2.75b • Danny Kirsche has a very interesting technical call on airlines and travel sector.... He called the rally perfectly last time is now flagging that technically, they are looking very similar to their May lows.

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Value basket underperforming led by banks and autos

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Recorded 10am GMT / 5am EST

Europe marginally down on the day. Slightly higher volumes with earnings to the fore - but lack of conviction with the Fed later today
On balance market expecting a dovish tone from the Fed but we discuss the difference between dovish speak and action
Banks and Tech lagging on earnings... Retail and Luxury outperform

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$ weakness big focus ahead of big macro and earnings week

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• Rising tensions as China retaliated to Houston consulate shutdown by ordering shutdown of US consulate in Chengdu. • Tech names leading Europe lower -3% • SXXP +80bps turnaround since then after a flurry of positive European PMI data • The Eurozone PMI composite came in at 54.8 vs cons 51.1 • Cellnex -5% post confirming Sells 13.2m Existing Shares at EU57/Share. This was part of the rights issue announced yday. • Vodafone -5% a lot of incoming why, appears to be some disappoint that there was only a modest beat to 1Q Service Rev growth & co. only reit guidance. Some concerns about potential deteriorating trends. • IMI +9% post blow out earnings update, Expecting big earnings upgrades. • Centrica +20% post announcing sale US biz, co. received £2.8bn which was almost £1bn more than expected.

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• The US markets were weak into the close last night , so this was mostly after the Senate leader McConnell said that he does not expect congress to pass the stimulus bill in next two weeks, to put this in context, the draft for this stimulus bill was due yesterday. • Trump’s payroll tax cut proposal which is opposed by the Democrats and also does not have widespread support among the Republicans. • In the US Total reversal on Mondays rhetoric with Growth names weak vs value up (and Energy +6% big driver there) --- so the market is finding it very challenging to find consistency. VIX +6% • Virus news: study has suggested that recovering from Covid may not offer much protection from future infections for those with a mild case that did not require intensive care... The researchers found that antibody levels fell quickly, current estimates seems to be around 90 days, and occurred more rapidly than with SARS. • Oil & Gas (yesterday’s winner) underperforming -2% as we see a risk off led selloff in crude and Brent both down around 1%.. • Valeo -8% after reporting earnings miss last night, we have reiterated out underperform rating on the stock.

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Recorded 10:45am Uk time / 5:45am EST * Europe solid, trading +1.5-2% * Rally led by value with newsflow +ve in Autos and banks --- lack of tech / WFH basket weightings also a feature in Europe * Eurogroup formally announced makeup / split in stim package and split slightly better for periphery so Italian banks and BTPs trading better * Autos contributing to rally with solid earnings out from Continental * Industrials in focus with a plethora of earnings - general tone positive. Sector remains mid range on the day and indeed the year --- I think how the sector trades through earnings season it key indicator for the broader market THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: www.jefferies.com/globaljefferiesllc

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Low volume start to a big earning week.

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• Europe is unch on the day, volumes are fairly muted as well • The EU meeting on the Recovery Fund started today at 9am London time. We could potentially start seeing some headlines in the afternoon over the possible disagreement points. There is also a press conference scheduled in the evening, likely after market close. Market expectations from the summit are low with the central scenario being that another summit needs to be scheduled towards end July/beginning August. • STERLING weakness continues trading below €1.10 more press spec. expectations that UK BOE will cut rates by 10bps at next meeting. • BoE Governor Bailey is speaking at 11am London time and any comments around negative rates being off the table would be closely watched. • Unlike in the US overnight Tech is +1% outperforming ... • Ericsson +10% as the cos second quater Results tops ests + Maintains FY20 & FY22 targets. helping sentiment acorss the sector STM +3%, IFX +2.5% • Auto's +1.6% vol's +50% driven by Daimler +4.5% post earnings • ASSA ABLOY -2% from opening +4% post +ve earnings also Wartsila -1% having opened +7% also doing the same

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Sell off impacted China weakness and a busy day of European earnings

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Risk on and earning focused morning

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Recorded 10:30am GMT / 5:30am EST

Europe -1.5% with growth /momo names sold - mirror of US weakness into close
California headlines and rising US/China tension cited
Earnings season kicks off today in the US.. CITI, JPM & Wells Fargo report later. Options implied move >6.5% which is huge
Single stock vol feels like it will a significant feature this reporting season and index vol also looks too low

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• Europe is trading +60bps a slight fade from having opened +1% • SHCOMP +1.8% seemingly ignoring all the technical sell and exhaustion signals and not least the fact that Trump said over the weekend that a phase two trade deal with China isn’t under consideration, and that the relationship between Washington and Beijing has deteriorated too much. • Crude in focus - dropped back befllow the $40 mark this morning, after yo-yo session Friday but talk of Opec+ starting output easing controls in August - just to highlight that the organisation is set to meet on Wednesday. • DNB +9% is after reporting a Net interest income beat, capital also came out better and impairment better too. • Miners are outperforming again this morning.. As Copper, Silver and Gold all continue to extend their gains. RIO +>2% is continuing to reach all time highs. • Atlantia -14% after Italy's prime minister rejected a final offer from the company owned by the Benettons family, which is trying to retain the contract at a tollway unit following a deadly bridge collapse. • Semiconductors are outperforming following a report that US semiconductor firm Analog Devices is near to a $17b all-stock deal to acquire smaller peer Maxim Integrated Products. AMS SM +5% • 4.30pm BoE’s Bailey speaks

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• Volitile start in Equities this morning, Europe opened down half a percent... But then saw a 100bps turnaround becore fading back to unch on the day.. No major macro headlines caused the rally are there wasn't any real spike in activity on HT or LT to account for the rally so indicating it's likely futures led. • Italian industrial Production data albeit for the month of May this was a significant beat; it came in at 42% MOM vs cons 24% and previous number which was -19%. • New cluster cases in Tokyo and HK raised concerns over potential second waves and re-closure of certain sectors in the economy. Hence why in Asia HK -~2% was weak. • In the commodity space; Crude is lower again this morning - the breakdown a function of derisking on US/China headlines, on contract bans of Chinese co.'s using govt contracts, but also due to production being resumed at an oil field and refinery in Libya • Food and BEvs +50bps are out performing, helped by CARLSBERG +5% after H1 just prereleased is VERY positive. Massive beat vs current consensus on the operating profit line so the Danish regulator forces the pre-release. CARLB saying they expect H1 operating profit -8.9% vs our -23.9% and street -26%

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• Europe is trading +20bps - low volumes -20% in the stocks 600, on 20DMA basis, and considering how low the volumes have been the last 20 days that is becoming and increasing low bar for comparison so really still feels like we are awaiting to • SHCOMP +140bps, impressive rally despite CSRC pouring a little cold water on the mkt as they clamp down on margin financing and Reuters quoted Chinese media warning investors to "respect the market, manage risks and pursue rational investments" • Europe is led by Tech +230bps, • SAP +8% -- who pre-announced beating expectations.. and is one of the first software companies to report preliminary 2Q results this is sending ripples through the sector. crucially 2020 guidance was maintained, which we view as achievable. 2023 guidance was again maintained, which continues to imply a very strong rebound in new cloud bookings in 2021/2022. • miners +80bps are also strong today... testing 200dma which has been a resistance level for a number of days and funneling sector into an increasingly narrow range for a month • RR -8% after trading update, the key numbers showing that the cashflow was in line with the street, CO still exploring cash raise. • BOO +25% we had call last night, is anyone wants thoughts then get in touch the call is actually been recorded so is still available to listen to this FT article Multiple Boohoo inspections find no modern slavery offences • In terms of data release, the only notable release is the US initial jobless claims, though its importance has reduced following the strong payroll reports.

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Recorded 10:15am GMT / 5:15am EST

Europe -40bps - following on from lazy session in Asia, however China continues its stampede higher
Volumes very poor, -15% in Europe and Asia. It feels like with markets at the upper end of the range we need confidence from earnings have conviction either way from here
Banks in focus... Very poor in the US on NPL concerns and also dragged lower in Asia on talk the US may look to intervene in the HKD/USD peg.
Staples acting very well, I don't think its just a reflection of defensive positioning in a poor tape, I think its better clarity on consensus numbers with pre close chats mostly out the way

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• Europe is trading -1% which is more or less where we have been trading all morning, not really surprising given the risk off mood in Asia • China continued to outperfoming Asia again and closed +40bps...Looking at the technicals on breakout interesting to note the RSI is close to touching 90 on the SHCOMP • Friction between the UK and Beijing • Bearish sentiment comes after the Fed’s Bostic comments yesterday • In terms of Sectors there is no real risk direction there, Autos UNCH are relatily outperforming and Banks and Pharma both-down around 150bps.. Are at the bottom of the pile • Cellnex in focus with press spec of a €3b capital raise to fund future acquisitions... • Sodexo -6% despite org growth -29.9% Q3 organic revenue growth is ahead of -36.2% consensus.. Iterestinly looks like the market has paid more attention to the Q4 guidance which was reduced from -15% to -27% • Bank of Italy data shows LTRO lending to domestic banks rising to €345bn in June, up from €291bn in May (and €215bn at the start of the year).

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Recorded 10:15 GMT / 5:15am EST* Europe +0.1% having opened -1%

Super strong session in Asia with China closing just under 6% - largest move since early 2019

=> A few drivers for move and breakout is against the grain of institution flow so painful move

Value rally represented in Europe so banks and autos very strong
UK housebuilders also feature with reports UK govt to increase the threshold for which stamp duty kicks in

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Payrolls data still to come

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Risk off start to the quarter but volumes very light due to German exchange problems.

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• This mixed start in Europe follows a strong overnight session in Asia where the regions closed in the green across the board, including HK despite the US revoking HK's special trading status and China's NPC officially passing the National Security Law in HK (both expected). Worth noting as well that this is ahead of the July 1st Hong Kong SAR Establishment Holiday. We also had some data from Chinese Manuf PMI 50.9 cons 50.5 and Non-Manuf +ve, PMI 54.4 cons 53.6. • Month end / Quarter end / 1H end happening today. • Yesterday’s meeting between Merkel and Macron on the EU Recovery Fund reiterated their support to the current EU commission proposal. • Banks -150bps underperforming so significantly today after such a strong start to the week yesterday, this faded too quickly to suggest any real conviction behind the move • Tech +50bps is at the top of the table. Chips in particular are in focus after Micron Tech was +5% aft hrs on high volume after 3Q bottom line beat and solid guidance for 4Q as well • And watch LUXURY after some Mixed comments from ..LVMH chairman says there are some signs of a "quite vigorous" recovery in the month of June

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Quiet start to the week ahead of busy macro picture and quarter end tomorrow

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• Europe is trading +1% now, however this is on very damp volumes, the SXXP volumes are down -40% • death rate in America continues to decline. It is also worth noting that when you dive into the numbers you'll see that the increase in cases in America is in fact amongst younger generations. • And in Western Europe the data is very encouraging as it continues to provide the best evidence that Farr’s Law in practice. This region is now eight weeks into a reopening and cross border travel has re-commenced. Yet daily new cases and deaths are 88% and 91% off their peaks. • UK outperforming +1.5% a bit of a rebound from yesterday’s weakness in the region but also helped as The effort by the UK and the EU to reach a post-Brexit trade deal has been stumbling on. • ECB data shows another month of significant buying of sovereign debt by banks in the euro area. In total now, over the past three months, banks added €249bn of bonds to their holdings - a record amount. And this is BEFORE the €500bn of extra liquidity made it into the banking system through TLTRO-III this week.

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Europe flat but a volatile start.

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• Europe is -200bps, Futures getting hit after headline: US targets $3.1 bln of Eu, Uk products for new tariff • NYT suggesting US may be barred from entering Europe from July 1st due to lack of control over the virus - Brazil & Russia also on the list but China is not which may be cause for some friction • Market took a turn for the worse after ECB’s Lane spoke this morning on the ECB’s response to the pandemic. Pepp is not open-ended phase of stimulus.. • We also have Fed’s Evans and Bullard speaking today. Yesterday’s comments from Bullard were optimistic on the economic recovery, in contrast to Powell’s comments two weeks back, where he painted a bleak picture of the US economy. No BoE’s purchases today and the Fed would buy $1.225bn of 7.5Y to 30Y TIPS. • TMT in focus as o T-Mobile placing priced at $103 & Dell +19% aft hrs on news its exploring options for its VMWare stake (valued at $50b) which could include spinoff, o Dialog semi +9% upped guidance $290 million to $305 million compared with a previously forecast range of $260 million to $290 million... saying Coronavirus Fuels Demand o AMS+8% of the back of this, helped by broker upgrade

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Positive macro data leading to a risk on rally

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Recorded 10:30am GMT / 5:30am EST

Europe +0.1% having opened -1%
Thin volume tape with rising dispersion with limited risk leadership
Resilience of markets impressive despite increasing virus fears ...
UK big focus.. Potential social distance cut coming tomorrow, VAT cut coming? and BoE talking about (when the time is right) reducing balance sheet pre rate rise.. Does this open the door again to negative rates with the lower bound not being zero?
German woes... Lufthansa -5% with large holder wanting to block the government takeover... Wirecard -35% -- over the last few days WDI has knocked 130 points off the Dax, that's 1%

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• Europe is trading +80bps Our flow, as has been for the last week is 2:1 better to sell. • Crude back above 40 • No definitive direction in terms of risk, slightly more to the risk off... Both Utils and Energy both +1% are outperforming and Banks are inline and the reits are firmly at the bottom of the table -1% ... • Finland & Sweden plus the Quadruple Witching - Stock Index Futures, Stock Index Options, Stock Options, Single Stock Futures all Expire today

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Central bank focus

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Positive sentiment remains but big macro focus persists

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Risk on rally

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Recorded 10:30am GMT / 5:30am EST

Europe -1.5%, was down as much as 3%.
90% of headlines citing virus returning to Beijing but track and trace seems in full swing and local investors don't seem spooked
Early weakness in Europe being bought - we are 2:1 better to buy
VERY busy week with macro events, UK non retail opening, Powell speaking 3 times, ECB/BoE & TLTRO results
Expiry Friday - starting to look at pin risk

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Macro themes driving

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• Europe -250bps this morning with all sectors in the red. VIX +10% back above 30. Net Momo continues to outperform as the Momentum shorts -4% are pushed lower led by airlines -7%. • Resurgence in local virus infection rates is hitting US states that have recently reopened, causing concern about a potential second wave. • After the European close yesterday The Fed delivered a dovish message, even managing to exceed market’s dovish expectations • In terms of the Feds guidance on Yield Curve control they kept the door open for further steps at the coming (likely September) meetings. • ECB’s Chief Economist Lane was also very dovish overnight arguing that the ECB needed to increase the PEPP size at the last meeting and is ready to expand its tool kit further. We do not expect new measures from the ECB at the July meeting, but the dovish stance would prevent any meaningful sell-off in core rates and support peripheral spreads.

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• Europe now just turned negative after being up as much as 1% this morning... And the stocks 600 are seeing Lower volumes today as the market awaits the decision from Fed • News spec that the ECB is planning to create a bad bank. • HAWKISH ECB headlines out from one governing council member questioning the need for more stimulus. Headlines: low inflation only being short term risk & he thought PEPP increasing further isn't necessary • Were predicting that the Fed will be on the dovish side ignoring the recent positive performance in risky assets or the "strong payroll data".

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Recorded 10:45 GMT / 5:45am Eastern Time

Europe -1.5%, was down as much as 2%. Quite the move after markets opened up on the day
All asset classes showing similar risk off trends, yield curve flattening a feature which sees banks hit particularly hard
Airlines "only" -2%, mid table, and we look into short base and utilization rates to conclude its hard for HFs to press the sector lower from here
Tech resilience reflecting LO demand for growth on the pullback
Factor and style baskets showing huge moves and volatility which or me shows just move much this is a macro tape today
Tobacco in focus with BATS trading stmt a little bit soft on 2Q and NGP guidance also walked back a bit

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Europe trading at intraday highs although -0.3% on day. Macro themes the driver once again as US 10yr as continues its sell off which further supports equity rally, 2 /10yr spread continues to widen which is positive banks hence the SX7E +3.5% we are seeing buyers in space today. Some big sectors dispersion & factor baskets moves that are worth highlighting, overall we are seeing a 550bps dispersion between best & worst. Value basket +2.2% now +5% in last 2session and 10% in a week this hs been driven by

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• The European markets have rallied 150bps this morning on volumes up 50% • US 'potentially' adding $1t of fiscal stim next month With the next Federal Reserve meeting only a week away. • Risk on indications; seeing the shape of yield curve steepening with the 10yr Eurobonds +5% • The rally is heavily lead by the Banks +4% and in fact all indicators showing signs of risk on sentiment; Energy and Autos also outperforming

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Europe is trading back at lows -0.8%. Mkt did try to rally off the lows but now fading. Biggest theme is a pause in the risk on trade we have seen dominate this week. This move is being led by some profit taking in Auto’s & insurers both -2% and volumes continue to be heavy >50% in theses sectors.
Biggest focus today is on ECB update, headlines will hit at 12.45pm UK time but detail will come from with is due at 1.30pm. As we mentioned earlier in the week focus in on details re: Pandemic Emergency Purchase plan Cons. Is that this is increased & extended in duration (the range is ~€250bn to €750bn;
Auto’s -2.3% worst performing sector in EU led by likes of Daimler -4%, German ruling coalition decided to only subsidies electric vehicles and hybrid electric vehicles up to a car value of 40k euros. Cars with “normal” combustion engines won’t be subsidized.

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Recorded 10:15am GMT / 5:15 Eastern Time

Europe +1.5-2% - strong beta led rally continues... volume much better as well
Insurers, Energy & Autos leading us higher with single stock news and crude rally helping
Healthcare underperforming and source of funds for rally
Looking at the positioning in S&P it remains close to record low... so the broad based rally thus far is NOT on covering... but supports the notion covering could support markets more going forward, ie buy the next dip
Microstrategy note from us well worth a read today... We are looking at cash flow burn
Two ongoing conferences for us today... Healthcare & renewables

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• Sentiment +ve in Europe this am having opened 40bps momentum has picked up and now +150bps on day. S&P futures did see a wobble overnight some newswires pointing at Trump comments but feedback from clients that this was nothing new & so no surprise to see mkts push on. • Mkt rally led by AUTO's +5%(vol’s +90%) led by German names playing catch up(given mkt closed yday): DIA GY +9%, BMW GY, PAH3 GY and VOW GY +6%. Be aware yday were +ve headlines re: German auto stimulus looks more broad than green. • Macro front USD getting hit hard with the DXY Index down below 97.50, its lowest level since mid-March. Focus today on ECB at 2.45pm UK time ; ECB will publish the monthly breakdown of its QE purchases, which will for the first time include the details of the PEPP programme

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• Europe trading +50bps having been up as much as 110bps this morning • Europe faded 50bps after headline stating that china is said to halt some US soy imports.. Which reduces the trade 1 deal's chance of survival. • Various May PMIs today across Europe; Italy recorded the smallest contraction at 45.4 vs cons 36.8, while Germany fared worst which showed a small miss at 36.6 vs cons 36.8. And France came in at 40.6 vs cons at 40.8. The Eurozone just missed at 39.4 cons 39.5. • In terms of sectors all are in the green; however bear in mind Austria, Germany, Denmark, Norway & Switzerland all closed today for public holidays so this is skewing things a but and volumes are predictably low. Seeing the uptick in the Airlines +3% • Dollar earners performing well on USD weakness, USDEUR at its lowest in last 2 months • Steel & Miners +2.5% outperforming: Chinese policymakers announcing an official budget deficit for 2020 that is expected to reach an all time high of 3.6% of GDP. • Also worth flagging we have a few notes out post our structural winners conference last Friday including: ASOS, SIKA, DB1 GY and BOOHOO. • Jefferies Healthcare conference starting tomorrow.

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• Europe > -1% this morning on slightly elevated volumes, particularly in the Tech and and Healthcare names. • We have the MSCI rebalance today. Globally, its Healthcare set to have the most buy flow of $3.9b vs Consumer Disc the largest sell flow of $3b. • And Another equity raise last night ... Flutter to sold 8m shares in a $1b primary issuance, currently trading 4% higher than the issue price. We reiterated our buy • Keep an eye out for Trump: giving news conference about China today • Some European markets are closed on Monday; Austria, Germany, Denmark, Norway & Switzerland

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Recorded 10:15am GMT / 5:15 Eastern Time

Europe +0.7% but value notable underperformer, -1%
Airline +2% (Easyjet +5% on earnings) but Autos and Banks -1% -- so big divergence within value
Hangover day in Europe with regard to EU rescue fund... after the euphoria yesterday on the grant / loan skew we now need to get it all signed off...
Heathcare +2% on no news so maybe showing rotation back into stay at home and virus proxies?
Placings AGAIN. Rolls Royce & IWG placing and have gone very well... despite my call yesterday that perhaps the market was a bit exhausted...

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Recorded 10:30am GMT / 5:30am Eastern Time

Risk on rally continues AGAIN!. Europe +1.5% - banks and autos very strong
Airline rally also in full swing but watch for sell signals with other areas of value taking up the mantle
We talk about makeup of rally in terms of lack of rotation and covering contributing
ECB's Lagarde comments I think a bit too optimistic on projections for Euroarea GDP next week
HOWEVER - market friendly headline our from the EU commission where they are announcing split of €750m rescue fund with €500 in grants which is a relief to the Southern European countries

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Recorded 10:15am GMT / 5:15am Eastern Time

Risk on rally continues. Europe +1% adding to 1.5% rally yesterday
UK +2% on catchup trade after market closure yesterday, but that is actually an under performance vs yesterday with GBP +1% a headwind
Airlines +10% on greater clarity of Lufthansa govt support and Spain following Italy's lead from last week suggesting they will be open for business in time for the tourism season

=> However.. What if we get a tourism war, rather than a currency war. Ie What if countries start to focus internally on tourism? Japan have announced package to incentivise internal tourism...

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Europe opened down -1% post a Risk off move started about 2am UK as yields lower, Futures hit during Asian as HK close -5.5% lows & Shanghai -2% amid headlines that China's plans to impose a national security law on Hong Kong.

Asian exposure names leading EU weakness this am: Prudential -7%, HSBC -5%, Luxury also weak led by Moncleer -2%, LVMH -1.5% although BUBERRY +2.5% post better tan expected earnings.

EU continues to tick higher driven by a high beta turnaround & a 400bps rally in EU BANKS now +1% on day banks volume +10% aswell. Auto's also up on the day so does appear some rotation back in value names.

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General risk off across asset classes overnight & this am with $ strength & bond yields lower post more -ve US/China headlines.

Eurostoxx Volumes are light -20% & Dax -30% be aware we have Scandinavia & Swis closed for mkt holidays today. Overall Clear theme today is risk off & with lights volume to continue tomorrow ahead of a long weekend in US & UK with mkts shut on Monday.

Europe has rallied off the lowsly mid morning post the PMI Manf & Services data out across Europe, we saw France, Germany, and UK beat cons. Estimates.

Client focus again is on cash calls from corporates. £1bn right issue this am from Whitbread 1st EU hotel group to come to mkt.

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Europe unch but some large single stock moves. Nearly 20 names are -10% in 2 days on now news.

U.K. SELLS BONDS AT NEGATIVE YIELD FOR THE FIRST TIME however this is at the 2y so not a surprise as it is mimicking the market pricing,,, the real news is what baily said in terms of negative rates further out on the curve. Now market just awaiting comments from BoE's Baily at 2:30pm UK time => we continue to see retail selling of UK banks as a reflection of the uncertainty there

Asia pretty resilient overnight and helping futs stabilise. Casinos stronger in HK after Macau mulls reopening tourism in 3 stages. Weaker ¥ post announcement of BoJ meeting helps Japan outperform

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Eurostoxx futs down on day having opened strongly, optimism regarding EU €500bn virus fund has waned post comments from French Economic minister Le Maire who said the EU fund would not be ready before 2021

As expect very busy start to Europe as short selling ban ends across many EU countries hence volumes in Eurostoxx +90% & in Spain & Italian volumes +200%

Since Eu closed last night we have also seen 3 decent sized corporates capital raising with >$3bn in cash calls. Lions share of that has come from COMPASS Group only trading -2%

Macro focus on: UK jobless data not as bad as feared as UK furlough scheme having the desired impact. German ZEW beat & later we have FED Powell & Treasury Secretary Steven Mnuchin appear before Senate Banking Committee.

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Recorded 10:30am GMT / 5:30am Eastern Time * Europe +2.5-3% - solid risk on move but despite 2x SD move volumes -10% -- suggesting a CTA or macro led rally * Italy’s unlock plan a big focus and it read much more liberal than perhaps many were expecting – I think this is a key driver today * We have ALL European short ban rolling off a midnight tonight – UK and Germany in focus with many expecting outperformance of these regions in coming days with shorts rolled into other peers in continental Europe * Commodities very strong building on last weeks gains. Iron ore breaking out and decent move in front month WTI back above $30 THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: www.jefferies.com/globaljefferiesllc

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-Europe +1% this morning, Europe's rally into the close yesterday is continuing into the early hours this morning driven by the huge turnaround in Value. -Overnight saw a mixed session in Asia caused by rising Tensions between US and China - Germany is in Focus today... DAX +1.5% is outperforming today.. Despite German GDP YoY miss... Coming in at -1.9% (cons -1.6%) - BASIC RESOURCES +4% in EU best performing sector & Volumes +50% 2points

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Recorded 10:15am GMT / 5:15am Easter Time

Europe -1.7%, melt down on continued concerns this week
Some big technical levels being tested - we flag target of 7% lower from here on pure technical perspective

=> However, very hard to fight the massive stimulous packages

Banks and Autos very poor today on earnings/divi cuts so drag on value
Focus on CHF with SNB deposits rising rapidly indicating they are defending the 1.05 level....

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Europe -1.5% as market wakes up to likelihood of 2nd wave in infections

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More bearish news on resurgence of coronavirus cases - Telco in focus as VOD +8% retains do I - Oil ciments from BP CEO and Saudi Aramco retains dividend

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Recorded 10:15am GMT / 5:15am Eastern Time

Europe -0.4%, 1% pullback from the highs
Virus related headlines over weekend stacking up on the negative side

=> Uk unlock difficulties, German R rate 1.1, Pickup in cases in South Korea & some members of White House self isolating

Travel and leisure worst performing sector led by airlines - stark contrast to performance of US names
Retail continues to act very well... We continue to see buying of the online sector and also defensive buying generally in equities
Volatility creeping back up after large pullback Friday - some buy signals forming

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UK AND DENMARK CLOSED

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Recorded 10am GMT / 5am Eastern Time

Europe +90bps, gentle rally from the open
VIX -5/6% fair reflection of sentiment. Macro drivers elsewhere muted
Aft hrs earnings in Lyft and Paypay interesting in terms of offering green shoots of return to normality
Norges bank cut rates to zero from 25bps, BoE kept rates unch
Retail a big focus with strong earnings from online retailer Zalando and Puma
Industrials in focus with Rolls Royce comments disappointing with lack of guidance

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Wednesday 6th May - Europe unch, lots of placings - UK PMI Miss - ECB comments - oil +5% extending gains - Asia’s positive auto sales

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Recorded 10:30am GMT / 5:30am Eastern Time

Europe +1.3%, having been up as much as 2%
Soothing headlines on US/China with press suggesting its all about ensuring phase 1 is adhered to, ie that China buy US goods
Value rally today with crude higher and earnings from Total and Repsol in Oils helping (no divi cuts)
Banks strong with BNP solid on earnings
We look at earnings the rest of the week and highlight ones with broader market risk
Swedish 1Q GDP a bit focus... Only -0.3% cons -1%

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Recorded 10:30am GMT / 5:30am Eastern Time

Europe -3.5% - catch-up move with most of Europe closed Friday, markets that were open Friday only -0.5-0.7%
US vs China tensions driving sentiment and obscuring better virus death rates in Europe and US
China and Value baskets sold hard but on limited volumes
Telecos a focus for hte market after Freenet cuting divident and moe speculation that BT will also cut later this week
Big week to UK. We await how restrictions will be lifted (Irish plan over weekend as blueprint), also we have BoE monetary policy statement and interim stability report

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BATS -5% is too much, but idea. Fits the dividend yield rotation play - Energy and materials extending losses (-4%).

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Recorded 10:15am GMT / 5:15am Eastern Time

Europe -0.3% with value underperformering after recent gains
Month end with continued talk of sell programs around given recent o/p of equities vs bonds - notable pick up in volumes generally today
Monster volume in FANG names on up move aft hrs yesterday halting the recent rotation trade
Banks big underperformer on fade in value - uk retail also under pressure
Oils in focus - RD Shell cut the divi prompting talk of rotation within FTSE hurting yield - we think staples and tobacco best placed to absorb flows

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Recorded 10:30am GMT / 5:30am Eastern Time

Europe +0.3% treading water after recent gains
$ slightly lower in Fx, elsewhere pretty calm in rates and credit
Italy d/g at Fitch to BBB- (1 notch above junk - out of cycle move
Virus - talk of Germany's R-rate moving back toward 1 post easing of restrictions - note Uk looks like it will extend lockdown with lack of testing & tracking technology
Earnings a bit focus - positive skew to outcomes

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Europe +2% - rallying for a 2nd day running. Volumes picking up on move up. Big turnaround in Oil was -20% now -6%. Earnings big focus Bank +3.8% leading Europe as Value factor driving the move up as was case in US overnight. THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research Please refer to Jefferies’ important disclosure via this link: https://www.jefferies.com/Disclaimers/Jefferies-LLC-Global-Disclaimer/Pages/560

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Recorded 10:30am GMT / 5:30am Eastern Time

Europe +2% - all sectors in the green
Rally feel sustained – other asset classes supportive including short covering in BTP
Plenty of headlines on economies reopening – I point out the bull case in how majority of economies can operate with social distancing guidelines in place, but the rally will continue to not be broad based
Earnings & headlines on state aid a focus

*Big movers: Deutsche Bank +11%, InterContinental Hotels +4%, Bayer +4%, Renault +7%, Ashtead +7% -- Airbus -3%

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Recorded 10:15am GMT / 5:15am Eastern Time

Europe -1%, off the lows of -2% in lasst 15 mins on no news - futures led rally
Weakness overnight mix of Eurogroup meeting extension and Gilead drug headlines
Huge focus on Italy with regard to upcoming S&P review and 2 weeks of waiting for solution on funding
Equity volumes very low and wider dispersion. Beta undermining on low volumes and credit wider

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Recorded 10:15am GMT / 5am Eastern Time

Europe unch having traded in a 1% range through the morning so far

*Credit tighter on ECB following the Fed’s pledge to take fallen angels on their balance sheet as collateral * Eurogroup meeting later today – talk of €2t in recovery funding but still no clear path in how and when that will be distributed * 28 companies have reported with some notable vol today – we run through the more pertinent movers * Macro data in Europe very poor, French and German PMIs big misses and US Jobless claims later in the US remain a focus

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Recorded 10am GMT / 5am Eastern Time

Europe bouncing +1.5% but on very low volume
Core bonds selling off mirroring equities
Lack of focus on crude a feature - WTI calm but brent sell off remains. We look a bit more at long term contracts and read thru to energy names
Looking at tech after hours earnings and huge volume in Netflix after hours - where from here?
Earnings big focus today in Europe, beta moves to upside in 5-6 names distorting the market
Banks rallying but on very light volumes - we see sector as key trigger for the market

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Recorded 10:30am GMT / 5:30am Eastern Time

Eurostoxx and Dax futs down 2%
Crude is all over the place, front month WTI back negative after trading between $1-2 early this morning its currently trading at -$3.50

=> CL2 getting hit hard now, -20% and Brent is also starting to fall, that is -20%

Market focus outside crude on earnings & health of North Korea leader Kim Jong Un
Market volumes a bit better than yesterday, so +25% DoD but still -30% vs the 2 week average
On earnings a few out as we build through the week but notable how low volatility is in the reported names
Note after the close today we get earnings from Netflix...

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Recorded at 10am GMT / 5am Eastern Time

Europe +0.5% but on very low volumes
Narrative on virus over weekend much improved
Rotation a big theme in the US on Friday – we discuss why US energy bid vs EU energy
Crude still a focus with front month WTI -20%...
Focus growing on ECB and banking sector ahead of Eu summit later this week
Reporting season peak is on us, 130 of the Stoxx600 report this week – similar percentage report in the US

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Recording time 10am GMT / 5am Eastern Time

Europe +2.5% on reports of progress on Covid19 cure (not vaccine)
Short covering a feature
Stay at home baskets being sold
WTI front month being hit very hard and storage constraints

THIS IS NOT EQUITY RESEARCH: This material is a marketing communication and is not and should not be construed as investment research

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Jefferies EMEA Market Minutes: Recent Episodes

Meredydd Watts