European cash equity markets are broadly lower ahead of the midway stage with the Euro Stoxx 600 on course to snap a five-day winning streak (FTSE -0.2%, DAX -1.3%, CAC -0.2%, FTSE MIB -0.1%). Basic resources are among the worst performers following reports yesterday that China are pushing back against US demands in trade negotiations. From a regional perspective, the German DAX has underperformed by some distance as index heavyweights Bayer and BMW fell sharply. We have seen some divergence in the bond markets meanwhile with German 10-year Bunds slightly lower and Gilts in the green with the latter benefiting from mixed consumer price data. Headline UK CPI rose +1.9% YoY (f/c. +1.8%) while the core rate was a touch softer at +1.8% YoY (f/c. +1.9%). Turning to currency space, the aforementioned data did not have much impact on the pound although Gbp/Usd had already been pulled lower by Brexit related uncertainty. UK opposition lawmakers are seeking an emergency debate in parliament to challenge PM May’s pursuit of a short-term delay to Brexit. May is expected to make her request to the EU later today. Elsewhere in FX, moves have been relatively muted with the Dollar Index +0.1% to 96.5 while safe haven demand for the Japanese Yen was limited by dovish remarks from Bank of Japan Governor Kuroda. Oil prices are lower with US crude futures down -1.0% while spot gold has lost -0.2%. Looking ahead, futures are pointing to a relatively flat open on Wall Street as investors look ahead to the FOMC policy decision later today.
Key Headlines/Data:
* European Corporate News:
– Bayer (-12.2%): US jury rules Bayer weed killer was to blame for man’s cancer
– BMW (-4.7%): Sees FY19 pretax profit down over ten-percent and announced €12.0 Bln in cost cuts
– Inmarset (+17.7%): In talks with a private equity-led consortium over a $3.3 Bln takeover bid
– Antofagasta (-1.6%): Cut to ‘reduce’ from ‘hold’ at HSBC
– Deutsche Post (-1.0%): Raised to ‘buy’ from ‘hold’ at HSBC
* Theresa May will not ask EU for long extension (BBC News):
– Theresa May will not be asking the EU for a long delay when she formally requests that Brexit is postponed, Downing Street says.
* @tnewtondunn (Political Editor – The Sun): Here we go. The crisis is about to deepen considerably. Anna Soubry reveals Alison McGovern tabling an SO24 emergency debate, which will begin the process of Parliament attempting to take control of Brexit extension length from PM
* @PaulBrandITV (Political Correspondent – ITV): CONFIRMED: @Alison_McGovern to table SO24 motion which essentially gives parliament control of Brexit so it can force a longer delay. Understand it will have the backing of Plaid, SNP and Greens. Labour front bench TBC.
* EU Commission President Juncker said they have moved considerably to accommodate Britain and cannot do more.
* Bank of Japan Governor Kuroda said they would consider further earing if momentum towards hitting the price target is lost.
* German PPI Data (Feb):
– PPI M/M -0.1% versus +0.2% expected, previous +0.4%
– PPI Y/Y +2.6% versus +2.9% expected, previous +2.6%
* UK Inflation Data – CPI, RPI and PPI Output (Feb):
– CPI M/M +0.5% versus +0.5% expected, previous -0.8%
– CPI Y/Y +1.9% versus +1.8% expected, previous +1.8%
– Core CPI Y/Y +1.8% versus +1.9% expected, previous +1.9%
– RPI M/M +0.7% versus +0.7% expected, previous -0.9%
– RPI Y/Y +2.5% versus +2.5% expected, previous +2.5%
– PPI Output M/M +0.1% versus +0.1% expected, previous 0.0%
– PPI Output Y/Y +2.2% versus +2.2% expected, previous +2.1%
* UK ONS House Price Index Y/Y (Jan) +1.7% versus +2.3% expected, previous +2.5%
* UK CBI Trends – Total Orders (Mar) 1 versus 5 expected, previous 6
