European cash equity markets are broadly higher ahead of the midway stage (FTSE +0.3%, DAX +0.7%, CAC +0.8%, FTSE MIB +0.6%). Basic resource stocks are among the best performers, boosted by renewed trade optimism after US Treasury Secretary Mnuchin said they have held constructive talks in Bejing. Bank stocks are also in focus this morning with heavy losses in Swedbank and Nordea amid the ongoing money laundering scandal. The risk on tone was also evident in the bond markets where UK and German government borrowing costs have edged higher following a barrage of economic data. In short, UK Q4 GDP was revised a touch higher YoY to +1.4% from +1.3%, German retail sales were stronger but unemployment fell less than expected while Spanish GDP was soft. Reaction to the aforementioned data was muted with investors firmly focused on Brexit developments. Sterling did rally to a new daily highs in recent trade at $1.3136 amid speculation that a substantial number of Labour MP’s will vote for the withdrawal agreement this afternoon (debate ends at 14:30 GMT). Elsewhere in FX, we have seen minor outperformance in the trade sensitive currencies (Australian Dollar and New Zealand Dollar). In commodity space, oil prices are firmly in the green with US crude futures up over one-percent while spot gold has gained +0.1%. Looking ahead, futures are pointing to a higher open on Wall Street having risen to new highs in recent trade. On the data front, we await US personal income/spending, PCE, Chiago PMI, Michigan Sentiment and new home sales plus Canadian GDP and producer prices.
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