European cash equity markets are broadly higher ahead of the midway stage with the Euro Stoxx 600 touching its best level since December 5th (FTSE 1.3%, DAX +1.2%, CAC +1.5%, FTSE MIB +0.7%). Trade sensitive stocks are among the best performers following reports overnight that suggested the US were considering lifting tariffs on Chinese goods. Banks have jumped on a combination of M&A talk and positive broker action while energy related companies have followed oil prices higher – both US crude futures and Brent are up over one-percent. The improvement in risk sentiment was also evident in the bond markets with Bunds and Gilts both firmly in the red although off their worst levels after UK retail sales fell short of expectations. Treasuries declined meanwhile with the US 10-Year yield at its highest since December 28th. Turning to currencies, the Dollar Index is flat while Sterling slipped to the bottom of the G10 pile on the aforementioned retail sales miss and ongoing Brexit related uncertainty. The Swedish Krona emerged as the outperformer meanwhile after parliament approved Social Democrat leader Lofven as PM in a deal with the Centre, Liberal and Green parties. Looking ahead, futures are pointing to a higher open on Wall Street with earnings due from Schlumberger and State Street. On the data front, we await Canadian CPI plus US industrial production and Michigan Sentiment as well as possible comments from New York Fed President Williams and Philadelphia Fed President Harker.
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