European cash equity markets are broadly higher ahead of the midway stage (FTSE +0.4%, DAX +0.6%, CAC +0.3%). We have seen outperformance in sectors with larger exposure to China – basic resources and technology – ahead of a meeting between US President Trump and Chinese Vice Premier Liu He. Shares in Societe General have also jumped amid reports the French lender is to cut thousands of jobs at its investment bank. In fixed, core European bonds are higher for the day with German 10-Year Bunds advancing to new session peaks after soft German IFO data – the business climate index fell to 98.5 (f/c. 99.0) from 99.3. There was little reaction to Euro Zone CPI as the January readings were unrevised from the flash estimates. Brexit related uncertainty may also have lent support as UK press reports suggested UK PM May is facing a ministerial revolt over the possibility of a no-deal scenario. Turning to currencies, moves have been relatively muted with the Dollar Index flat at around 96.6. We have seen minor outperformance in the Australian Dollar and Canadian Dollar while the Japanese Yen and Sterling are at the bottom of the G10 pile. Elsewhere, oil prices are ahead with US crude futures and Brent up +0.6% while spot gold is flat. Looking ahead, futures are pointing to a higher open on Wall Street while Canadian retail sales and Belgium business confidence make up a quiet data calendar. We also expect comments from Fed President’s Bostic and Williams plus ECB President Mario Draghi.
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