European cash equity markets are mostly lower ahead of the midway stage with the Euro Stoxx 600 on course to snap a three-day winning streak (FTSE -0.9%, DAX -0.6%, CAC -0.3%, FTSE MIB +0.1%). Consumer staple stocks are among the worst performers, dragged lower by Beiersdorf after their CEO warned the sector is in turmoil. We also saw heavy declines in Air France and Metro Bank. From a regional perspective, the FTSE 100 has underperformed for a second day as the pound rose to a fresh seven-month high versus the Greenback. Trade weighted Sterling gained to its best level since April 2018 as investors become increasingly confident that the UK will avoid a no-deal Brexit. Overnight press reports suggested PM May was close to winning concessions from the EU that could persuade Eurosceptic MPs to back her. Elsewhere in currency space, the Norwegian Krone is the best performer among the G10’s, boosted by stronger-than-expected retail sales and higher oil prices. The Canadian Dollar has also gained on energy markets moves. The Euro meanwhile was relatively unfazed by Euro Zone confidence indicators which were mostly higher than expected. We also heard from the ECB’s Weidmann who said the ECB should look through short-term weakness and the next steps should depend on inflation developments over the medium-term. With respect to oil, US crude futures are up over one-percent following a surprise drawdown in API crude inventories overnight. Spot gold is down -0.1%. Looking ahead, futures are pointing to a lower open on Wall Street with earnings still to come from Best Buy and TJX. On the data front, we await US advance goods trade balance, factory orders and pending home sales plus Canadian CPI.
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