euro zone inflation, GDP and earnings

— Brian Evans and Sarah Min

The euro was 0.1% higher against the U.S. dollar at 11:36 a.m. in London, pushing past broader strength in the greenback after the euro zone economy rebounded from a recession with 0.3% growth in the first quarter.

Figures out Tuesday also showed headline inflation remaining steady at 2.4%, which economists said reinforced the case for the European Central Bank to begin cutting interest rates in June.

Support for the euro came from the better-than-expected growth, which suggested a “less urgent” need for accomodative monetary policy from the ECB beyond June, Jane Foley, head of FX strategy at Rabobank, told CNBC by email.

The euro was up 0.22% against the British pound at 0.855.

— Jenni Reid

Euro zone inflation held steady at 2.4% in April, preliminary data published Tuesday showed. This was in line with estimates. Prices rose 0.6% on a monthly basis.

Core inflation, which strips out energy, food, alcohol and tobacco, came in at 2.7% in April, slightly lower than March’s reading of 2.9%.

Meanwhile, gross domestic product for the bloc rose 0.3% over the first three months of the year, following a 0.1% contraction in the last quarter of 2023.

— Sophie Kiderlin

Airline group Air France-KLM on Tuesday said its operating loss in the first quarter totalled 489 million euros ($525 million), citing costs associated with disruptions and a slower cargo business.

“We nonetheless remain confident in our ability to achieve our 2024 unit cost outlook,” group CEO Benjamin Smith said.

Group unit cost rose 4% in the first quarter, but is expected to come in at 1-2% for the full year, the company said, adding that measures including a support staff hiring freeze would be taken to reduce expenses.

Air France-KLM shares were last down 3.4% at 11:04 London time.

Fellow Airline group Lufthansa, which also reported first quarter earnings on Tuesday, likewise said it would cut costs by halting new projects, cutting operational costs and closely assessing the need for additional administrative staff.

— Sophie Kiderlin

HSBC on Tuesday announced the surprise departure of Chief Executive Officer Noel Quinn, who held the position for nearly five years.

Quinn will remain as Group CEO as the bank begins searching for his successor.

“The Board would like to pay tribute to Noel’s leadership of the Company. Noel has had a long and distinguished 37-year career at the Bank and we are very grateful for his significant contribution to the Group over many years,” said Group Chairman Mark Tucker.

“During his tenure, HSBC has delivered record profits and the strongest returns in over a decade,” said Aileen Taylor, group company secretary and chief governance officer in HSBC.

The bank also announced first-quarter earnings that beat market expectations on Tuesday. Its London shares were almost 4% higher at 10:24 London time.

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— Lim Hui Jie

Germany’s gross domestic product increased by 0.2% in the first three months of 2024 from the previous quarter, the country’s federal statistics office said Tuesday. The figure is seasonally and calendar adjusted.

The GDP growth was attributed to investment in construction and in exports, the statistics office said.

Germany’s GDP had declined by a revised 0.5% in the last three months of 2023.

A 0.1% GDP rise in the third quarter narrowly prevented Germany from entering a technical recession, which would be characterized by declines in two consecutive quarters.

— Sophie Kiderlin

German carmaker Volkswagen on Tuesday said its operating profit dropped by 20% in the first quarter as weaker demand for its premium brands drove a drop in sales.

Operating profit came in at 4.6 billion euro ($4.9 billion) in the first three months of 2024, the company said. Operating profit had been 5.7 billion euros over the same time period in 2023.

Europe-traded shares of Volkswagen were last down 2.19% at 8:59 London time.

Read the full story here.

— Sophie Kiderlin

Global automaker Stellantis on Tuesday reported a 12% decline in revenue in the first quarter, citing lower sales and foreign exchange effects, even as net pricing held firm.

Shares of Stellantis were down 1.6% as of 8:55 London time.

Chief Financial Officer Natalie Knight said year-over-year shipment and net revenue comparisons were difficult due to the company’s transition to a “next generation product portfolio manufactured on new platforms.”

Read the full story here.

— Jenni Reid

Europe stocks were mixed on Tuesday, with the benchmark Stoxx 600 index opening slightly lower and trading 0.07% lower at 8:20 a.m.

The U.K.’s FTSE 100 was up 0.38%, while France’s CAC 40 was down by 0.1% and Germany’s DAX was 0.1% lower.

— Sophie Kiderlin

German luxury carmaker Mercedes-Benz posted a 30% annual drop in first-quarter earnings before interest and tax to 3.863 billion euros ($4.13 billion) on Tuesday, coming in below a LSEG projection of 3.87 billion euros for the period.

Total unit sales at the group’s Mercedes-Benz cars division declined by 8% to 462,978 units, with the company attributing the fall to model changes and supply chain bottlenecks in the Chinese market. Sales in the carmaker’s Top-End category accounted for 14% of the first-quarter total, with the availability of top-end products curbed by model transition of the G-Class and the Mercedes-AMG derivatives of the E-Class and GLC.

“Current supply bottlenecks are on the way to easing in regard to the GLC and E-Class, with further improvements expected,” the company said in its outlook disclosures. “Sales levels in the first quarter are seen as the trough, with second quarter volumes expected to be better.”

Sales at the Mercedes-Benz Vans division meanwhile increased by 7% year-on-year to 105,425 vehicles in the first three months of the year, in what the company said was a new record for the first quarter.

“Mercedes-Benz wants to hold and defend pricing at current levels,” the carmaker said, forecasting 2024 group revenue in line with the previous year and a 10-12% range in adjusted return on sales over the period.

— Ruxandra Iordache

Danish brewer Carlsberg posted higher sales in the first quarter, slightly outperforming analyst expectations according to Reuters data.

Volumes rose by 0.2% year on year in Western Europe, by 3.1% in Asia and by 2.2% in Central and Eastern Europe and India, following an overall 0.5% decline in sales through 2023.

Revenue grew 4.4% to 17.1 billion Danish krona ($2.45 billion) in the quarter.

“If we look at the trading environment, we are definitely pleased with the beginning of the year,” Carlsberg CEO Jacob Aarup-Andersen told CNBC’s “Squawk Box Europe” on Tuesday.

“But there are still clouds hanging over us and the rest of the industry, it’s a tough consumer sentiment out there, whether we’re looking at our European businesses or our Asian businesses, we’re not seeing the same positive consumer momentum we saw a couple of years ago,” he added.

Bank of America sees good news in the week ahead for equities, with risk skewed to the upside.

“Our economists see no sign of stagflation and expect a continued manufacturing recovery and strong job growth, which should be positive for stocks,” wrote strategist Ohsung Kwon in a note from Monday.

Kwon elaborated that this week’s manufacturing report should indicate that the manufacturing recession has ended. Additionally, Friday’s April jobs report is also likely to indicate strength and “little sign of slowing momentum in the labor market,” the strategist noted.

— Lisa Kailai Han

Balance sheets “look healthy,” cash flow generation is “attractive,” and dividends and buybacks are set to be resilient, Goldman Sachs says.

“Shareholder returns are poised to reach an all-time high,” the bank said in an April 23 note.

But not all stocks offering buybacks and dividends are equal, Goldman said.

It highlighted its baskets of buyback stocks for a diversified strategy. This basket offers a high single-digit yield with roughly 4% via buybacks plus 4% via dividends — with a sector breakdown as close as possible to the market, said Goldman.

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— Weizhen Tan