European cash equity markets are mostly lower ahead of the midway stage (FTSE -0.2%, DAX -0.1%, CAC -0.4%, FTSE MIB -0.2%). Trade sensitive stocks such as basic resources and autos have outperformed the broader market as investors hold out hope for a positive conclusion to the US-China trade dispute. Retail stocks have lagged meanwhile, weighed by a sharp drop in ASOS after the online retailer cut sales growth and profit margin forecasts. In the bond markets we have already seen volume begin to dwindle ahead of the Christmas holidays yet Gilts have still underperformed their German counterparts amid further rumblings of a possible second Brexit referendum. Macro data was largely ignored, including a downward revision to Euro Zone November CPI to +1.9% YoY from +2.0% in the flash, while the core rate was unchanged at +1.0%. Turning to currencies, the Dollar Index has dropped -0.2% to 97.25 in recent trade. The Euro, Swiss Franc and Swedish Krona are vying for the G10 top spot while Sterling has also edged up versus the Greenback this morning. Elsewhere, oil prices are ahead with US crude futures and Brent both up around one-percent. Spot gold is little changed. Looking ahead, futures are pointing to a relatively flat open on Wall Street with US consumer confidence and the NAHB housing index due for release.
Key Headlines/Data:
* European Corporate News:
– ASOS (-38.9%): Issued profit warning on weak growth, cutting sales growth and profit margin forecasts
– Standard Chartered (-2.1%): Sources – Near an agreement to separate private-equity unit
* Norwegian Trade Balance (Nov) Nok 26.2 Bln, previous Nok 34.9 Bln
* Senior IMF official said global economic growth will be a bit slower than forecast in October.
* Italian Undersecretary said the government is optimistic the EU will not open disciplinary action against the EU.
* Italian Trade Balance (Nov) €3.78 Bln versus €1.89 Bln expected, previous €1.27 Bln
* Markit: UK Households’ assessment of current finances most negative since June:
– UK households expect financial wellbeing to deteriorate over the coming year
– Living cost pressures intensify
– House price expectations lowest since July 2016
* Euro Zone CPI Data (Nov F):
– CPI Y/Y +1.9% versus 2.0% flash/expected
– Core CPI Y/Y +1.0% versus +1.0% flash/expected
* Euro Zone Trade Balance (Oct) €12.5 Bln versus €14.0 Bln expected, previous €13.4 Bln revised to €13.0 Bln
* Incoming ECB policymaker Wunsch (Belgium) said the ECB could delay rate hikes if growth slowed more than expected.
* Spokesman for UK PM May stated they would not be holding a second Brexit referendum, nor are there plans to hold an indicative vote in parliament on Brexit options.
