European cash are broadly higher ahead of the midway stage although gains are relatively modest (FTSE +0.5%, DAX +0.1%, CAC +0.2%, FTSE MIB +0.5%, IBEX -0.1%). Basic resource and technology stocks are among the best performers in the Euro Stoxx 600 which is trading just shy of a one-week high, boosted by growing optimism surrounding this week’s US-China trade talks. Heineken and Akzo Nobel have also surged post earnings while Germany’s Wirecard have slumped after a class action lawsuit was filed in California District Court. From a regional perspective, the Spanish IBEX has lagged slightly amid reports that PM Sanchez may call a snap election after today’s budget vote. In fixed, core European bonds opened little changed versus yesterday’s close but have since moved to the upside after some weaker-than-expected macro data – UK headline CPI slowed to +1.8% YoY (f/c. +1.9%) from +2.1% while Euro Zone Industrial production slumped -4.2% YoY (f/c. -3.2%). In currency space, the aforementioned data releases weighed on their respective currencies with Eur/Usd and Gbp/Usd reversing earlier gains to trade slightly lower as the Dollar Index edges up +0.1% to 96.8. The New Zealand Dollar is the best performer among the G10’s after the RBNZ struck a less dovish tone than many had expected overnight. The Swedish Krone also jumped on the Riskbank policy statement. Elsewhere, oil prices are ahead with US crude futures up +0.8% after failing to hold above $54/barrel yesterday while spot gold is flat. Looking ahead, futures are pointing to a slightly higher open on Wall Street with earnings due from Hilton Worldwide and CBRE before the bell. On the data front, we await US consumer prices plus possible comments from Fed President/s Bostic, Mester and Harker.
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