European cash equity markets are broadly lower ahead of the midway stage (FTSE -0.5%, DAX -0.6%, CAC -0.5%, FTSE MIB -0.3%). Trade sensitive stocks including autos and basic resources are among the worst performers as Chinese growth concerns persist, while the latter was also hit by lower copper prices and a broker downgrade for mining heavyweight Rio Tinto. Euro Zone banks stocks are in red ahead of the ECB decision having jumped higher yesterday on a sources report that suggested policymakers would cut their economic forecasts and signal fresh bank loans. In fixed, core EU bonds are slightly higher for the day with little reaction shown to macro data released this morning, including Euro Zone Q4 GDP that was revised one-tenth lower to +1.1%. Spain did fall short of its maximum target amount in a triple tranche bond offering but investors appear to be keeping to the side-lines ahead of the aforementioned policy decision. Turning to currencies, the Dollar Index has edged down -0.1% to 96.8 in recent trade. The Antipodeans are the weakest on some mild profit taking although soft Aussie retail sales will also have played its part. We also saw some weakness in the Swedish Krona after Riksbank Governor Ingves said the repo rate path is a forecast and not a promise. Elsewhere, oil prices are ahead with US crude futures up around +0.7% while spot gold is flat. Looking ahead, futures are pointing to a lower open on Wall Street. North American data releases include US unit labor costs, non-farm productivity and jobless claims plus Canadian building permits. More interest will likely be paid however to the European Central Bank ‘Monetary Policy Decisions’ and ‘Press Conference’ with President Mario Draghi due at 12:45 GMT and 13:30 GMT respectively.
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