European cash equity markets are broadly higher ahead of the midway stage although the Euro Stoxx 600 has yet to yet to challenge yesterday’s three-month peak (FTSE +0.5%, DAX +0.8%, CAC +1.1%, FTSE MIB +0.6%). Earnings season continues to play its part with notable gains for Allianz, RBS and Vivendi post-earnings leading to outperformance in their respective sectors – banking and media. Basic resources are also firmer following the latest round of US-China trade talks despite the lack of a joint communique as officials agreed to meet again in Washington next week. In fixed, core European bonds are nursing minor declines with stronger-than-expected UK retail sales data adding to the downside pressure. Headline retail sales rose +4.2% YoY (f/c. +3.4%) while the core rate gained +4.% YoY (f/c. +3.0%). Data elsewhere saw Spanish CPI unrevised from the flash readings and the Euro Zone trade surplus widen to €17.0 Bln from €19.0 Bln. Turning to currencies, moves have been relatively muted so far today with the Dollar Index up +0.1% to 97.1. The Euro is the weakest among the G10’s, closely followed by the Swiss Franc while the New Zealand Dollar sits atop the G10 pile. Sterling has inched higher despite yesterday’s defeat for UK PM May as stronger-than-expected data provided support. Elsewhere, oil prices are ahead with US crude futures and Brent both up around +0.5% while spot gold has also added +0.5%. Looking ahead, futures are pointing to a slightly high open on Wall Street. On the data front, we await US Empire manufacturing, imports prices, industrial production and Michigan Sentiment plus possible comments from Atlanta Fed President Bostic and Cleveland Fed President Mester.
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