European cash equity markets are broadly higher ahead of the midway stage (FTSE +1.6%, DAX +0.7%, CAC +1.5%). Technology stocks have outperformed and helped the Euro Stoxx 600 rebound from yesterday’s two-year low as concerns related to Huawei and broader US-China trade relations cooled somewhat. Investors have also welcomed some stability in the oil markets as Brent crude futures add around one-percent at the recent high. Prices did fall sharply yesterday after Saudi Energy Minister al-Falih played down the likelihood of a deal today. He offered a similar assessment this morning while the Nigerian Oil Minister said an OPEC+ cut close to 1 Mln BPD is the most likely scenario. In fixed, core EU bonds are in the red despite a steady stream of weaker than expected data including German industrial production, UK Halifax house prices and most recently Euro Zone Q3 GDP that was revised to +1.6% YoY from +1.7%. Turning to currencies, the Dollar Index has inched up +0.1% to just shy of the 97 handle as investors tread cautiously ahead of the US jobs report this afternoon. Sterling has seen some minor underperformance versus its G10 peers meanwhile after a UK government spokesman stated that the Brexit vote will take place on Tuesday as planned. Looking ahead, futures are pointing to a slightly lower open on Wall Street. Besides the US jobs report, we also await US trade data, Michigan Sentiment and wholesale inventories plus Canadian labour market data.
Key Headlines/Data:
* European Corporate News:
– Fresenius SE (-16.2%): Sees flat profit next year and abandoned 2020 targets
– Roche (+2.2%): Lung cancer won FDA approval
– Associated British Foods (-2.9%): Warned of challenging trading for Primark
– Tesco (+5.0%): BNP Paribas raised the stock to ‘neutral’ from ‘underperform’
– AstraZeneca (+0.3%): Cancer drug failed to meet main goal in late-stage study
– Akzo Nobel (+2.7%):Macquarie begins coverage with an ‘outperform’ rating
* Saudi Energy Minister al-Falih said he is not confident there will be a deal today:
– Nigerian Oil Minister said an OPEC+ cut close to 1 Mln BPD is the most likely scenario
– UAE Energy Minister said he is optimistic they will reach an agreement that will be good for the market
* Spokesman for Italian Economy Minister Tria categorically rejected earlier reports suggesting Tria was set to resign
– Deputy PM Di Maio also started he was not seeking Tria’s resignation. He added that Italy will avoid the EU’s disciplinary procedure
* Norwegian Manufacturing Production M/M (Oct) +1.5%, previous -0.3%
* German Industrial Production Data (Oct):
– Industrial Production M/M -0.5% versus +0.3% expected, previous +0.2% revised to +0.1%
– Industrial Production Y/Y +1.6% versus +2.1% expected, previous +0.8%
* French Trade Balance (Oct) -€4.1 Bln versus -€6.0 Bln expected, previous -€5.7 Bln
* French Current Account Balance (Oct) -€0.70 Bln, previous -€1.90 Bln
* French Industrial Production Data (Oct)
– Industrial Production M/M +1.2% versus +0.8% expected, previous -1.8% revised to -1.6%
– Industrial Production Y/Y -0.7% versus -1.4% expected, previous -1.1% revised to -1.0%
* UK Halifax House Price Data (Nov):
– House Price Index M/M -1.4% versus +0.5% expected, previous +0.7%
– House Price Index 3M/YoY +0.3% versus +1.0% expected, previous +1.5%
* Spokesman for UK PM May said the Brexit vote will take place on Tuesday as planned.
* Italian Retail Sales Data (Oct):
– Retail Sales M/M +0.1%, previous -0.8%
– Retail Sales Y/Y +1.5%, previous -2.5%
* Bank of England/TNS Inflation Expectations – 12 Months +3.2%, previous +3.0%
* Euro Zone GDP Data (Q3 F):
– GDP Q/Q +0.2% versus +0.2% expected, previous +0.2%
– GDP Y/Y +1.6% versus +1.7% expected, previous +1.7%
* Euro Zone Employment Change Data (Q3 F):
– Employment Change Q/Q +0.2% versus +0.2% expected, previous +0.2%
– Employment Change Y/Y +1.3% versus +1.3% expected, previous +1.3%
