European cash equity markets are mixed ahead of the midway stage (FTSE -0.6%, DAX -0.2%, CAC 0.0%, FTSE MIB +0.5%). Basic resource stocks jumped at the open after Chinese officials signalled additional stimulus measures overnight but gains have since faded while the bank and insurance sectors took over as the best performers. From a regional perspective, the UK’s FTSE 100 has fallen behind this morning after UK PM May saw her Brexit deal overwhelmingly defeated in the House of Commons and now faces a confidence motion later today – the vote is expected around 19:00 GMT and she is widely expected to win. Sterling has been relatively stable meanwhile having rebounded yesterday on the parliament vote with many believing this could lead to a softer Brexit rather than a no-deal scenario. Chancellor Hammond has also reportedly told business leaders that parliament could vote next week to delay Article 50. UK macro data was largely ignored with headline CPI inline at +2.1% YoY while the core rate was a touch stronger tat +1.9% (f/c. +1.8%). Elsewhere in FX, the Dollar Index has edged up +0.1% and is just about holding onto the 96.0 handle while the Antipodean currencies have slumped to the bottom of the G10 pile. At the ECB, Executive Board member Mersch said the slowdown in the Euro Zone economy is what they were expecting and now it has come, they don’t have to consider it again in their response. Villeroy added that rate increases will be extremely gradual and depend on the economic situation in the Euro Zone. Looking ahead, futures are pointing to a relatively flat open on Wall Street with earnings due from Bank of America and Goldman Sachs before the bell. On the data front, US retail sales and import prices are both due at 13:30 GMT although may fall foul to the government shutdown.
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