European cash equity markets are broadly lower ahead of the midway stage (FTSE -0.2%, DAX -1.1%, CAC -0.6%, FTSE MIB -1.2%). Media stocks are among the worst performers, dragged lower by Publicis after the French advertising company posted weaker revenue which has since prompted a downgrade at Deutsche Bank. We have also seen heavy declines in TUI and Societe Generale after their respective updates while Unicredit surged almost six-percent at the highs on solid Q4 profit. Risk sentiment was on the back foot from the open but did deteriorate in recent trade after the EU Commission slashed their growth forecasts for the region. The EU27 economies are now expected to grow +1.5% this year, down from +1.9% while Italy was cut to just +0.2%. Earlier macro releases also played their part, including weaker-than-expected German and Spanish industrial production. As such, core EU bonds are firmly in the green while Treasuries have extended above the overnight highs as investors flocked to perceived safe-haven assets. This was also evident in the currency markets where the Japanese Yen is the best performer among the G10’s closely followed by the Swiss Franc and US Dollar. Elsewhere, oil prices are in the red with US crude futures down around -0.6% while spot gold is flat. Looking ahead, the Bank of England policy statement, meeting minutes and inflation report are all due for release at midday, followed by a press conference with Governor Carney from 12:30 GMT. Meanwhile, futures are pointing to a lower open on Wall Street with earnings expected from Kellogg and Twitter before the open. On the data front, we await US initial jobless claims.
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