European cash equity markets are mixed ahead of the midway stage with moves in either direction on the small side (FTSE +0.3%, DAX -0.3%, CAC -0.5%, FTSE MIB 0.0%). Oil related stocks are among the best performers, tracking crude prices higher with front-month Brent back above $63 for the first time since early December. Germany’s Wirecard has also surged over ten-percent as they maintain no wrongdoing as alleged by the FT while the auto sector is providing a drag. Moves in the bond markets have also been relatively muted with German Bunds nursing a minor loss; Gilts crept up to a new session high after UK construction PMI fell short of expectations at 50.6 (f/c. 52.6). Italian BTP’s did drop again at the open after Friday’s slump but have since recovered back to flat for the day. Data elsewhere saw Euro Zone Sentix investor confidence drop to -3.7 (f/c. -0.6) from -1.5 while PPI was also below forecasts at +3.0% (f/c. +3.2%). In currency space, the Dollar Index has edged up +0.1% to 95.7 while the Japanese Yen has fallen to the bottom of the G10 pile. Sterling has softened slightly on the construction PMI miss and ongoing Brexit related uncertainty as the picture has not become much cleared over the weekend. Looking ahead, futures are pointing to a relatively flat open on Wall Street with earnings due from Sysco before the bell. On the data front, we await US Factory Orders, ISM New York and the Conference Board Employment Trends Index.
Key Headlines/Data:
* European Corporate News:
– Wirecard (+13.1%): Company sees no conclusive evidence of criminal misconduct related to recent FT reports
– Ryanair (-3.5%): Q3 Net Loss -€19.6 Mln versus -€7.0Mln expected
– Julius Baer (-4.2%): FY Net Profit F 735 Mln versus F 772 Mln expected | Lowered cost-income and pre-tax margin goals.
– William Hill (+0.5%): Jeffries initiates a ‘buy’ rating
* May ‘could call June election’ and vows to ‘battle for Britain’ during talks for new Brexit deal (Sky News):
– Theresa May could be planning for a general election in June, according to reports, as the prime minister promised to “battle for Britain” during talks with Brussels.
– Downing Street advisers are understood to have drawn up plans to extend Article 50 – the clause which triggered the UK’s withdrawal from the EU, then secure the backing of parliament for a new Brexit deal in April before calling a general election in June this year.
* Italian Deputy PM Di Maio assured that the Italian government coalition is not at risk.
* ECB’s Nowotny noted that uncertainty is high but there is no chance of a recession. He also said that they will see an increase in core CPI.
* Spanish Unemployment Change (Jan) 83.5K versus 62.5K expected previous -50.6K
* Euro Zone Sentix Investor Confidence (Feb) -3.7 versus -0.6 expected, previous -1.5
* UK Construction PMI (Jan) 50.6 versus 52.6 expected, previous 52.8
* Euro Zone PPI Data (Dec):
– PPI M/M -0.8% versus -0.7% expected, previous -0.3%
– PPI Y/Y +3.0% versus +3.2% expected, previous +4.0%
* Italian CPI Data (Jan P):
– CPI M/M +0.1% versus +0.1% expected, previous -0.1%
– CPI Y/Y +0.9% versus +0.9% expected, previous +1.1%
– CPI EU Harmonized M/M -1.7% versus -1.9% expected, previous -0.1%
– CPI EU Harmonized Y/Y +0.9% versus +0.8% expected, previous +1.2%
