European cash equity markets are broadly lower ahead of the midway stage, led by underperformance in the technology sector after Apple CEO Tim Cook lowered their revenue guidance (FTSE -0.4%, DAX -1.2%, CAC -1.2%, FTSE MIB -0.7%). Trade sensitive stocks such as basic resources are also nursing heavy declines as Cook partly blamed weakness in the Chinese economy. In fixed, core EU bonds did open to the upside but have pared gains through the morning session and moved to new session lows in recent trade. There was minimal reaction to macro data – Euro Zone M3 rose +37% YoY (f/c. +3.8%) while UK construction PMI beat at 57.8 (f/c. 57.2). Turning to currencies, markets have stabilised from the sizeable overnight swings where the Japanese Yen surged across the board. Analysts have pointed towards low liquidity (Japanese markets were closed) and the Apple guidance as the catalyst. The Euro has edged higher versus the Greenback while Sterling has declined as UK Brexit Minister Barclay said the prospect of a no-deal scenario is far more likely if parliament rejects the PM’s deal. Elsewhere, oil prices are little changed on the day having pared an earlier drop while spot gold is up +0.3%. Looking ahead, futures are pointing to a lower open on Wall Street with Apple shares down over eight-percent in pre-market. Data wise, we await US ADP employment change, initial jobless claims, ISM manufacturing and construction spending.
Key Headlines/Data:
* European Corporate News:
– AMS (-19.8%) | Dialog Semiconductor (-9.8%): | STMicroelectronics (-9.9%): Apple suppliers fell after CEO Tim Cook lowered revenue guidance
– Next (+4.6%): Posted strong Christmas sales and boosted FY18 sales growth guidance
– Adecco (-4.4%): Cut to underperform from neutral at Credit Suisse.
– UBS (-0.5%): Chairman Weber said now is not the right time for a merger
* Norwegian Unemployment Rate (Oct) 4.0% versus 4.0% expected, previous 4.0%
* UK Brexit Minister Barclay said the prospect of a no-deal scenario is far more likely if parliament rejects the PM’s deal.
* Spanish Unemployment M/M -50.6K versus -55.0K expected, previous -1.8K
* Swedish Household Lending Growth Y/Y (Nov) +5.7%, previous +5.8%
* Swiss Manufacturing PMI (Dec) 57.8 versus 57.2 expected, previous 57.7
* Euro Zone Money Supply – M3 Y/Y (Nov) +3.7% versus +3.8% expected, previous +3.9%
– Loans To Households Y/Y +3.3%, previous +3.2%
* UK Construction PMI (Dec) 52.8 versus 52.9 expected, previous 53.4
