European cash equity markets are broadly lower ahead of the midway stage with the Euro Stoxx 600 touching a fresh one-week low in recent trade (FTSE -0.9%, DAX -0.6%, CAC -0.5%, FTSE MIB -0.7%). Oil related stocks have led the latest leg lower after the Norwegian government announced the government pension fund plans to divest from oil exploration and production companies. We have also seen notable underperformance in sectors with greater exposure to China such as basic resources and autos after Chinese trade data disappointed overnight. In fixed, German 10-Year bunds did extend slightly above yesterday’s post-ECB high while its US counterpart is little changed as investors look ahead to the US jobs report this afternoon. European macro data has promoted limited reaction meanwhile despite stronger-than-expected readings for French, Spanish and Italian industrial production. German factory orders were soft. Turning to currencies, the New Zealand Dollar has emerged as the strongest of the G10’s this morning while the Japanese Yen is not far behind on safe-haven demand. The Euro has also ticked higher and is holding onto the $1.12 handle having fallen sharply yesterday. On the Brexit front, recent press reports suggest UK PM May is to tell the EU that the outcome of a historic vote on her Brexit deal next week is in its hands. This follows a sources report overnight that said the EU offer fell short of what the UK was demanding. Elsewhere, oil prices are firmly in the red with US crude futures down almost two-percent at the lows while spot gold has added +0.6%. Looking ahead, futures are pointing to a lower open on Wall Street with all eyes on the jobs reports at 13:30 GMT (08:30 ET). We also await US housing starts and building permits plus Canadian labour market data.
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