[MARKET ANALYSIS] Tentative trade as markets await US CPI, though AEX is boosted by ASML; Deutsche Bank downgraded European stocks vs US

• European equities have traded tentatively throughout the morning, as markets await CPI. The AEX (+0.4%) is the key outperformer in the region amid gains in ASML (+1.2%) after Jefferies raised the Co.'s price target, thereby lifting the index. In brief, analysts raised ASML's PT to EUR 1,020/shr (prev. EUR 795/shr), citing the AI Capex boom. Nonetheless, the bank reiterated its Hold rating, suggesting that there is limited scope for further re-rating in ASML this year given the impressive upside seen already in the past 12-months. 
• Focus in Europe has also been on Deutsche Bank downgrading European stocks against US stocks. 
• European sectors are trading mixed, with Energy (+0.9%), Technology (+0.6%) and Banks (+0.6%) leading. The former has gained amid stronger crude prices given the heightened geopolitical tension between US and Iran, whilst ASML helps boost Tech. On the downside, Autos (-0.7%), Utilities (-0.7%) and Construction & Materials (-2.6%) lag. The latter faced steep losses due to Sika (-7.0%) after the Co.'s FY25 sales fell by 4.8%, with the Chinese market a continued weakness for them.
• Movers include gains in Symrise (+5.7%) after the Co. announces a EUR 400mln share buyback. This has spread into the Chemical (+0.4%) sector given the sector some slight momentum. Broker downgrade for Continental (-2.2%) has driven down its shares pinning down the Auto sector (-0.6%).
• US equities futures are mostly softer, with the YM (+0.2%) the key outperforming index. The NQ (-0.2%) has been pinned down by tech giant Microsoft, after US President Trump said that Microsoft will make changes to prevent consumers paying higher electricity bills as it expands AI data centres. Broker upgrades for both AMD and Intel at Keybanc, failed to lift the NQ. 
• Looking ahead, all eyes will be on US CPI, Weekly ADP and speak via Fed Barkin and Musalem. Earnings from JPMorgan, Delta Air, Bank of New York Mellon are due.

Markets are trading cautiously ahead of the upcoming US CPI release, reflecting uncertainty about inflation and its implications for future policy. The AEX is gaining, driven by ASML's strong performance following a price target increase from Jefferies, whereas Deutsche Bank's downgrade of European stocks relative to US equities may signal a shift in market sentiment across regions. Overall, the mixed sector performance in Europe suggests that investors are positioning themselves in anticipation of the economic data, paying close attention to potential rate impacts.