European cash equity markets are mixed ahead of the midway stage (FTSE +0.6%, DAX -0.1%, CAC +0.1%). Bank stocks are among the best performers, boosted by Deutsche Bank and Commerzbank after the German lenders confirmed over the weekend that they are in merger talks. From a regional perspective, the FTSE 100 is leading its European counterparts as exporters benefit from a weaker currency while the German DAX has been pulled lower by Adidas after a broker downgrade. In fixed, Gilts are ahead and outperforming their German counterparts as UK PM May struggles to find enough support for her Brexit deal ahead of a possible third meaningful vote tomorrow. There was little macro data for investors to work with besides the Euro Zone trade surplus that widened to €17.0 Bln and was largely ignored. Sterling is the weakest among the G10’s in currency space while the Euro and Antipodeans battle for the top spot. The Dollar Index is down -0.1% to 96.4. Oil prices are little changed with US crude futures down -0.1%. Spot gold is up +0.25%. Looking ahead, futures are pointing to a relatively flat open on Wall Street where data releases include the US NAHB housing index and Canadian international security transactions.
Key Headlines/Data:
* European Corporate News:
– Deutsche Bank (+4.0%) | Commerzbank (+7.5%): Confirmed in separate statements that merger talks are taking place
– Thyssenkrupp (+3.3%): Wings major order from Egypt’s El Nasr Company worth several hundred million euros.
– ING (-2.3%): Italian Central Bank banned ING from taking on new customers in Italy
– Adidas (-2.0%): Downgraded to ‘no-position’ at Evercore
– EDF (-1.1%): Cut to ‘hold’ at HSBC
* Donald Trump-Xi Jinping meeting to end US-China trade war may be pushed back to June, sources say (South China Morning Post):
– A meeting between US President Donald Trump and Chinese counterpart Xi Jinping to end the trade war may be put back to June, sources have said, as they will not be able to finalise an agreement by April.
* May in make-or-break bid to gain DUP support for her Brexit deal (Guardian):
– Theresa May will embark on a final desperate scramble to win the Democratic Unionist party’s backing for her Brexit deal on Monday, in the hope that it could unlock parliament’s support at the third time of asking.
@BBCJayneMcC (BBC Political Reporter) – DUP source on talks with the govt says they’ll not be “bounced” into anything, said the govt may have floated offers of £££ but for the DUP it’s all about ensuring the constitutional integrity of the UK. Likely to be radio silence today as they continue talking
* @Steven_Swinford (The Telegraph Deputy Political Editor) – I’m told 30 Eurosceptic Tory MPs are still opposed to PM’s deal & ERG calls over the weekend suggest positions have hardened. A lot hinges on DUP, but Eurosceptics increasingly believe she’ll have no choice but to pull MV3
* @JGForsyth (The Spectator Political Editor) – An office holder in the ERG tells me that if May offered to go (and DUP satisfies), number of Brexiteers rebels would fall to 20 or so
* Saudi Energy Minister al-Falih said they are not under pressure from the US to raise supply, adding that the oil market is oversupplied.
* German Foreign Minister Maas said it is worth having another round of talks before it comes to a hard Brexit.
* Euro Zone Trade Balance €17.0 Bln versus €15.0 Bln expected, previous €15.6 Bln revised to €16.0 Bln
* Bundesbank said German growth will remain subdued in the first-quarter due to weak industrial production.
