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FINWIRES

Germany's DAX Index Ends Week Higher; Deutsche Börse Gains

-- German equities finished the week on an upbeat note, with the blue-chip DAX index 2.27% higher at Friday's close, as markets digested signals of potential diplomatic progress in the Middle East.

Geopolitical tensions showed signs of cooling as a 10-day ceasefire between Lebanon and Israel took hold Thursday. Investors also responded positively to US President Donald Trump saying they are "very close" to reaching an agreement with Iran, adding that talks may resume over the weekend.

On this side of the Atlantic, the euro area recorded a trade surplus of 11.5 billion euros in February, following a revised trade deficit of 1 billion euros a month ago. Eurostat reported that exports of goods to the rest of the world declined by 6.7% year-over-year to 232.4 billion euros, while imports saw a 2.2% reduction, settling at 220.9 billion euros.

On the corporate side, Deutsche Börse (DB1.F) added 0.62%, as BofA Global Research upgraded its rating and price objective, citing the German exchange operator's solid market positioning amid current uncertainties.

"We upgrade Deutsche Borse (DB1) to Buy from Neutral with a new [price objective] of EUR300 (ADR $35.39) as we think it is best positioned among European exchanges in the current environment for greater volumes and NII on higher rates and cash balances. Q126 volumes are up double-digit % YoY in cash equities, fixed income derivatives and particularly commodities given energy disruption caused by the Middle East conflict, which has potential to persist. Accordingly, we raise cash EPS 6-7% and are 2-6% above Visible Alpha consensus. Our 2026 and 2028 forecasts now assume DB1's targets are met despite IMS headwinds. We see further EPS upside from the Allfunds (ALLFG) deal if approved (not in our estimates)," the research firm wrote.

Meanwhile, German technology group Siemens (SIE.F) plans to seek investor approval for the spinoff of medical technology company Siemens Healthineers (SHL.F) at its annual general meeting in February 2027. As part of the deconsolidation strategy, Siemens Healthineers shares will be distributed directly to existing Siemens shareholders. Siemens gained 3.36%, while Siemens Healthineers was up 1.46% at closing.

"The slower pace of the SHL spin-off will be disappointing to some investors, though was always a risk given the tight EGM timeframe. We note the longer-term business simplification story is clearly unchanged (and we would expect continued incremental SHL sell-downs on the market over time, in line with prior company comments)," analysts at RBC Capital Markets said in a quick-take note.

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Research Alert: Ewbc: Q1 Earnings Beat As Revenue Growth Outperforms

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:EWBC posted strong Q1 2026 results with operating EPS of $2.57 vs. $2.08 a year ago, $0.10 above consensus. Q1 revenue of $774M beat consensus by 3% and rose 12% Y/Y and 2% Q/Q. It was another record quarter as the bank reported record levels of loans, deposits, and fee income, while maintaining healthy credit quality. Net interest income outperformed with 2% Q/Q growth while the net interest margin improved 8 bps to 3.49%, driven by a 21-bp decline in deposit costs to 2.84% that more than offset a 9-bp decrease in loan yields. Balance sheet growth remained robust with total loans reaching a record $58B (+2% Q/Q, +7% Y/Y) and deposits hitting $69B (+3% Q/Q, +9% Y/Y). Loan growth was well diversified across commercial and industrial, commercial real estate, and residential mortgage portfolios. Fee income surged 13% Q/Q to record levels, with wealth management fees more than doubling. The bank's funding optimization efforts continued to bear fruit in the competitive environment.

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Oil & Energy

Hormuz Disruptions Deepen as Oil Prices Rebound and Recovery Timelines Slip, Wood Mackenzie Says

Strait of Hormuz flows remain sharply constrained, with vessel traffic far below normal 170 daily levels and energy markets reacting to ongoing disruption, Wood Mackenzie said Tuesday.Wood Mackenzie said the waterway remains effectively restricted despite ceasefire signals, with uncertainty over safe passage continuing to deter shipping activity.Although the US and Iran are moving toward renewed talks, both sides remain far apart on terms, raising the risk of prolonged disruption to Gulf energy exports.A two-week ceasefire announced on April 7 and a subsequent 10-day pause in Lebanon had briefly lifted optimism around easing tensions, Wood Mackenzie added.However, two Indian vessels were forced to turn back over the weekend after coming under fire while attempting to transit the strait, underscoring ongoing risks.Iran's Islamic Revolutionary Guard Corps warned ships against moving in the Persian Gulf and the Sea of Oman, saying, "approaching the Strait of Hormuz will be considered co-operation with the enemy."Traffic had risen modestly after the ceasefire, with about 20 vessels transiting daily, but this remains far below the roughly 170 ships seen in February, according to Wood Mackenzie.That limited recovery has reversed, with minimal vessel movement recorded on Sunday, signaling continued disruption across oil, gas, and chemicals markets.Oil prices initially fell after the ceasefire, with Brent dropping about 14% from around $110 to below $95 per barrel, and later reaching just above $86, according to the report.Prices rebounded, with Brent June futures rising about 5% to around $95 per barrel, while European gas prices climbed to 61.5 euros ($72.21) per megawatt hour before easing to 40 euros.The United States has tightened its blockade, seizing a cargo vessel and increasing pressure on Iran-linked shipping, while both sides exchanged sharper rhetoric over the weekend, Wood Mackenzie said.Tasnim, a media outlet affiliated with Iran's Islamic Revolutionary Guard Corps, identified several locations that could "enter the conflict zone" if hostilities resume, including the Bab al Mandeb Strait.It also named Saudi Aramco assets and key oil terminals in Yanbu and Fujairah, which serve as alternative routes bypassing the Strait of Hormuz, Wood Mackenzie added.Wood Mackenzie said a peace deal could allow some tankers to resume movement quickly, but full restoration of normal traffic through the Strait of Hormuz may take until the end of June, citing Alan Gelder, senior vice president.Liquefied natural gas exports could see an initial surge after a peace deal, but a full return to normal operations would take longer, Wood Mackenzie said.Massimo Di Odoardo at Wood Mackenzie said restarting Qatar's LNG output could take three to four weeks for the South complex, while recovery of northern facilities would require a longer timeframe.Rising tensions between the United States and Iran have cast doubt on recovery timelines, with prolonged disruption in the Strait of Hormuz threatening deeper imbalances in global energy markets, Wood Mackenzie said.Brent crude has averaged about $85 per barrel in 2026, warning that prices near $90 could push global growth below 2% and into recession territory, said Peter Martin at Wood Mackenzie.

Research

Research Alert: CFRA Maintains Buy Rating On Shares Of Quest Diagnostics

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