European cash equity markets are mostly lower ahead of the midway stage although declines are relatively modest (FTSE -0.4%, DAX -0.3%, CAC -0.4%, FTSE MIB -0.1%). Bank stocks are among the worst performers after Societe Generale warned that fourth-quarter results would be impacted by tough market conditions. Brexit related uncertainty has also played its part in dampening risk sentiment – having survived a no confidence vote, UK PM May now faces the arduous task of tweaking her withdrawal agreement to get it through parliament without irking EU leaders and crossing their red lines. Sterling has been relatively steady however with Gbp/Usd sitting just below the $1.29 handle having been in a relatively tight range since parliament voted against her deal on Tuesday evening. Elsewhere in FX, the Dollar Index is flat for the day around 96.1 while the Japanese Yen moved to the top of the G10 pile on safe-haven demand. Trade sensitive currencies (Aussie/Kiwi Dollar) have underperformed meanwhile US-China trade relations look to have soured on reports that US prosecutors are targeting Huawei in a criminal probe. On the data front, Euro Zone CPI data provided no real surprises as the headline and core rate were unrevised from the flash readings of +1.6% YoY and +1.0% YoY respectively. Euro Zne construction output rose +0.9% YoY. Elsewhere, oil prices are firmly in the red with US crude futures and Brent both down around one-percent. Spot gold is flat. Looking ahead, futures are pointing to a slightly lower open on Wall Street with earnings due from Morgan Stanley, PPG Industries and M&T Bank before the bell. US data releases include housing starts, building permits and jobless claims although may have been impacted by the ongoing government shutdown.
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