Optimism surrounding the US-China trade negotiations has cooled somewhat from yesterday as investors await further details of what was agreed at the Washington talks. As such, European cash equity markets are broadly lower ahead of the midway stage (FTSE -1.1%, DAX -0.1%, CAC -0.2%, FTSE MIB -0.1%). The FTSE 100 has underperformed by a wide margin as the pound rallied on reports that UK PM May is considering a delay to Brexit. In individual moves, we saw declines for Standard Chartered, Peugeot and Fresnillo after their respective updates. In the bond markets, German Bunds opened to the upside while Gilts were little changed but both have slipped to new session lows in recent trade. There has not been much data for investors to work with – German GFK Consumer Confidence was unchanged at 10.8 (f/c. 10.8) while French consumer confidence improved to 95 (f/c. 92) from 92. We did also hear from the ECB’s Lane who said he only expects reasonably small adjustments to the economic forecasts. Turning to currencies, as mentioned, the pound has surged to the top of the G10 pile on talk of a Brexit delay while comments from Bank of England officials at the Inflation Report hearings provided few surprises – Gbp/Usd topped out at $1.3238, its best level since mid-October. The Dollar Index has lost -0.1% to 96.35 while the Australian Dollar and Canadian Dollar are the weakest. Elsewhere, oil prices are little changed for the day with US crude futures down -0.1% while spot gold is down -0.1%. Looking ahead, futures are pointing to a slightly lower open on Wall Street. Data wise, we await US housing starts, building permits, house prices and consumer confidence. Fed Chair Jerome Powell will also testify to Congress from 15:00 GMT.
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