European cash equity markets are broadly higher ahead of the midway stage with the Euro Stoxx 600 rising to a fresh six-month high in recent trade and on course for a fifth straight daily gain (FTSE %, DAX %, CAC %, FTSE MIB %). Basic resources are among the best performers, led higher by Antofagasta after the copper-miner announced a higher-than-expected dividend. Luxury good stocks are also firmly in the green after the Swiss trade surplus widened in February. Moves in the bond markets had been relatively muted although German yields have jumped to new highs in recent trade having dipped slightly after a soft ZEW print. Gilts were largely unmoved despite stronger than expected UK jobs data, including average hourly earnings which rose +3.4% YoY (f/c. +3.2%). The data did provide a lift to the pound however and Gbp/Usd broke above $1.33 in recent trade after reports suggested the EU are planning a contingent offer on a Brexit extension. The Dollar Index has shed -0.2% to 96.3 having lost ground versus all the G10’s bar the Australian Dollar. Elsewhere, oil prices are ahead with US crude futures up +0.9% while spot gold has added +0.3%. Looking ahead, futures are pointing to a higher open on Wall Street where US factory orders and durable goods revisions are due for release.
Key Headlines/Data:
* European Corporate News:
– Antofagasta (+3.1%): FY18 EBITDA $2.23 Bln versus $2.26 Bln | Reaffirmed guidance
– Roche (+0.3%): FDA approves small cell lung cancer treatment
– Iliad (-1.2%): Cut FY20 cash flow target
– Commerzbank (-2.4%): Cut to ‘sell’ at Nord
– Royal Dutch Shell (+0.6%): Cut to ‘sector-perform’ at RBC
* Theresa May to ask for one year Brexit delay after smug Speaker John Bercow torpedoes third vote on EU deal (The Sun):
* @BBCNormanS (BBC Assistant Political Editor) – Looks like Govt shaping up to bring back meaningful vote anyway – and dare the Speaker to rule it out of order.
* @Peston (ITV Political Editor) – EU leaders are unlikely to grant a Brexit delay this week, sources tell me. They will instead request “clarity” from May on what a delay is for. Can she put party loyalties aside and hold thorough indicative votes next week, to prevent no deal Brexit?
* Swiss Trade Balance (Feb) 3.125 Bln, previous 3.043 Bln revised to 3.044 Bln
* Norwegian Finance Ministry maintained their 2019 non-oil growth forecast at +2.7%, cut 2020 to +2.5% from +2.8%
* UK Brexit Minister Barclays said talks with the DUP have been constructive and both sides want to see work continuing.
* Italian Trade Balance (Jan) €0.32 Bln, previous €3.66 Bln revised to €2.76 Bln
* UK Jobless Claims Change (Feb) +27.0K, previous +14.2K revised to +15.7K:
– Claimant Count Rate 2.9%, previous 2.8%
* UK ILO Unemployment Rate (Jan) 3.9% versus 4.0% expected, previous 4.0%
– Employment Change 222K versus 120K expected, previous 167K
– Average Hourly Earnings Y/Y +3.4% versus +3.2% expected, previous +3.4% revised to +3.5%
– Average Hourly Earnings Ex. Bonus Y/Y +3.4% versus +3.2% expected, previous +3.4%
* Euro Zone Labor Costs Y/Y (Q4) +2.3%, previous +2.5%
– Wages +2.3%, previous +2.4% revised to +2.3%
* German ZEW Survey – Current Situations (Mar) 11.1 versus 11.7 expected, previous 15.0:
– Expectations -3.6 versus -11.0 expected, previous -13.4
* German Economic Advisers have lowered their 2019 growth forecast to +0.8% from +1.5%
* Euro Zone Construction Output (Jan):
– Construction Output M/M -1.4%, previous -0.4% revised to 1.1%
– Construction Output Y/Y -0.7%, previous +0.7% revised to +2.1%
* EU leaders are said to plan a contingent offer on a Brexit extension, to allow UK PM May to try and get a deal through next week.
