European cash equity markets are broadly higher ahead of the midway stage with the Euro Stoxx 600 touching a fresh nine-week high in recent trade (FTSE +1.4%, DAX +1.1%, CAC +1.0%, FTSE MIB +0.9%). Company earnings remain in focus and BP shares have surged over four-percent after they posted stronger-than-expected Q4 profit, leading to outperformance in both the FTSE 100 and European energy sector. At the other end, Apple supplier AMS have slumped over ten-percent after they lowered revenue guidance and suspended their dividend. In the bond markets, German 10-year yields are ahead but off their best levels despite an upward revision to Euro Zone service PMI – more attention may have been paid to Italy where the service sector entered contraction territory. In the UK, ten-year borrowing costs are slightly lower have retreated after UK service PMI fell to 50.1 (f/c. 51.0). Turning to currencies, the Dollar Index is up +0.1% to 96.0 while the Australian Dollar is the top performer among the G10’s after the RBA were less dovish than many had expected overnight. The Swiss Franc is the weakest, closely followed by Sterling which began to drift lower after the aforementioned PMI miss. Elsewhere, oil prices are ahead with Brent crude futures up around +0.7% while spot gold has added +0.2%. Looking ahead, futures are pointing to a slightly higher open on Wall Street with earnings still to come from Viacom and Archer Daniels Midland. On the data front, we await US Markit service PMI and ISM non-manufacturing plus Canadian trade data.
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