European cash equity markets are mixed ahead of the midway stage (FTSE +0.6%, DAX -0.4%, CAC -0.1%, FTSE MIB +0.4%). Bank stocks have underperformed as government bond yields declined in response to yesterday’s dovish tilt at the FOMC while the resulting decline in the Greenback has boosted commodity prices and subsequently the basic resource sector. US ten-year yield hit a fresh 14-month low this morning at 2.51% and core European yields followed suit with Gilts deriving little support from stronger-than-expected UK retail sales. Central banks were in focus and a hawkish hike at the Norges Bank drove the Krone to the top of the G10 pile while the Swiss Franc largely ignored the Swiss National Bank as they stood pat on policy. Sterling is the weakest meanwhile having slipped to new lows in recent trade as a spokesman for May said she intends to bring forward a third meaningful vote as soon as possible. Oil prices are in the red with US crude futures down -0.3% while spot gold has added +0.3%. Looking ahead, futures are pointing to a slightly lower open on Wall Street. The Bank of England policy statement is up next at 12:00 GMT with economists’ forecasting a 9-0 vote to leave the Bank Rate on hold. On the data front, we await US current accounts, Philly Fed and jobless claims, Canadian ADP and wholesale sales plus Euro Zone consumer confidence.
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