DE40: ECB minutes point to possible rate cuts at September meeting

• European indices gain in the first half of Thursday's session 
• ECB minutes indicate possible rate cut at September meeting
• Bavarian Nordic results, JD Sports and Deutche Bank news in the background

General market situation:

Thursday's session on European stock markets is proceeding in a good mood. Germany's DAX is currently gaining 0.3% on an intraday basis. At the same time, France's CAC40 is adding 0.23%. Investor attention today turns to PMI manufacturing and services PMI data. Economic weakness in the Eurozone persists, which should lead to another cut from the ECB. ECB Minutes just released confirmed that the central bank's bankers will decide to cut rates at their September meeting.

Selected comments from the Minutes:

• The next meeting is widely seen as a good time to assess policy tightness
• Medium-term outlook unchanged from June meeting
• Short-term outlook has become slightly more “stagflationary.”
• Weaker activity likely to dampen inflation over time
• Economic balance remains uneven, mainly driven by services activity
• The labor market remains tight

Volatility currently observed in the broad European market. Source: xStation 

Germany's benchmark DE40 traded nearly 0.2% higher during Thursday's session. The index broke above a key resistance level set by the 50-day EMA (blue curve on the chart) and the local peaks of the consolidation zone of the last few sessions. Breaking through these zones could theoretically open the way for further increases towards the historical peaks at 19,000 points. On the other hand, however, it is worth bearing in mind that the scale of the recent rebound is sizable, which may lead investors to book some of the gains. In this aspect, a relatively important support zone may be the previously mentioned 50-day EMA and 100-day EMA (purple curve on the chart). Source: xStation

News:

Shares of Bavarian Nordic (BAVA.DK) are gaining as much as 13.5% today after the Danish company forecast reaching the upper end of its full-year guidance range after ordering a smallpox vaccine from a European country. Analysts expect an increase in earnings expectations for this year. The company says it has the capacity to produce 10 million doses of Mpox vaccine by the end of 2025.

SECOND QUARTER RESULTS

• Revenue DKK 1.43 billion, estimated DKK 1.18 billion 
• Ebitda DKK 420 million, estimated DKK 202.7 million
• Research and development expenses DKK 209.6 million
• Net profit DKK 261.1 million
• Production costs DKK 707.5 million

ANNUAL FORECAST

• Still expects revenues of about DKK 5.30 billion, estimated DKK 5.24 billion
• Ebitda still expected to be around DKK 1.35 billion, estimated DKK 1.35 billion

Deutsche Bank AG (DBK.DE) will review its plans for distributions to shareholders as it makes progress in resolving one of Postbank's biggest legal issues. The German lender expects pre-tax profit to rise by 430 million euros in the third quarter, after reaching agreements with more than 80 plaintiffs regarding the acquisition of the previously mentioned institution. The bank's shares are currently gaining more than 3%. 

JD Sports (JD.UK) shares rose as much as 10% after sales at the British apparel chain rose t last quarter despite a challenging business environment. The company reiterated its full-year outlook, but added that it remains cautious given the volatile macroeconomic environment.

ANNUAL FORECAST

• Pre-tax profit of GBP955 million to GBP1.04 billion, estimated at GBP978.8 million

Other news coming out of individual DAX index companies. Source: Bloomberg Financial LP