European cash equity markets are broadly higher ahead of the midway stage with the Euro Stoxx 600 touching a fresh session peak in recent trade (FTSE +0.3%, DAX +0.3%, CAC +0.7%, FTSE MIB +0.5%). Oil related stocks are among the best performers this morning, tracking gains in the oil markets with US crude futures up around one-percent at the highs. From a regional perspective, the French CAC 40 is leading as Airbus shares jumped over two-percent on news of a $35 Bln deal with China. Core European and US government bond yields have also gained this morning as risk sentiment improved globally although investors remain tentative, not least in relation to Brexit. UK lawmakers voted late last night to take control of the Brexit process and will hold a series of indicative votes in a bid to identify a majority in the House of Commons. More recently, Conservative lawmaker and ERG member Jacob Rees Mogg signalled that he may support May’s deal in a third meaningful vote as the only other option is no Brexit. This saw Sterling rise to new highs and the top of the G10 pile while the Australian Dollar is not far behind. The Japanese Yen and Swiss Franc are the weakest meanwhile as perceived safe-haven assets struggle. Spot gold is down -0.5%. On the data front, German GFK consumer confidence was soft at 10.4 (f/c. 10.8) while French Q4 GDP was confirmed at +0.3% QoQ. We also heard from the ECB’s Rehn who said the slowdown in the Euro Zone seems more durable than the short-term. He also added that the Governing Council does not want to raise rates prematurely. Looking ahead, futures are pointing to a higher open on Wall Street while data releases include US housing starts, building permits, house prices and consumer confidence.
Key Headlines/Data:
* European Corporate News:
– Airbus (+2.6%): Signed deal with China yesterday
– Bayer (-1.6%): Bayer, J&J settle thousands of U.S. Xarelto lawsuits for $775 million
– Ocado (+4.5%): Signed e-commerce partnership with Coles
– Convatec (+7.0%): Speculation of interest from private equity firm EGT
– ABN Amro (+0.8%): Steps up efforts to secure US banking licence
– Fresnillo (+1.2%): Upgraded to ‘equal-weight’ at Morgan Stanley
* May suffers fresh Commons blow as MPs grab control of Brexit process (City AM):
– Theresa May was hit by further ministerial resignations last night after three ministers quit the government in order to back a rebel amendment granting MPs the power to organise key Brexit votes today.
– It means MPs will today start voting on a series of alternative Brexit scenarios in a bid to identify where majority support lies in the Commons. However, the Prime Minister warned MPs yesterday that the government would not consider itself bound to honour any such vote, as it “could lead to an outcome that is unnegotiable with the EU”.
* German GFK Consumer Confidence (Apr) 10.4 versus 10.8 expected, previous 10.8 revised to 10.7
* French GDP Data (Q4 F):
– GDP Q/Q +0.3% versus +0.3% expected, previous +0.3%
– GDP Y/Y +0.9% versus +0.9% expected, previous +0.9%
* French Business Confidence (Mar) 102 versus 103 expected, previous 103
* Philadelphia Fed President Harker repeated he favours at most one rate increase this year.
* Swedish PPI Data (Feb):
– PPI M/M +0.3%, previous +0.8%
– PPI Y/Y +6.3%, previous 5.6%
* ECB’s Rehn said the slowdown in the Euro Zone seems more durable than the short-term. He also added that the Governing Council does not want to raise rates prematurely.
* UK BBA Mortgage Approvals (Feb) 35.3K versus 39.4K expected, previous 40.6K revised to 39.6K
* @Jacob_Rees_Mogg (ERG lawmaker) – The choice seems to be Mrs May’s deal or no Brexit.
* @tnewtondunn (Political Editor – The Sun) – Massive moment. The expectation among Tory grandees now is that PM uses the below to set a date for her resignation.
– Theresa May will address Tory MPs at the 1922 committee at 5pm tomorrow.
