European Stocks at Midday
Jun 13, 2018
- Despite weaker than expected Eurozone economic data, sentiment across European equity markets is positive ahead of today’s FOMC meeting and tomorrow’s ECB June meeting. Expectations are for the ECB to leave interest rates unchanged, but to confirm the unwinding of its QE policy towards the end of the year. The European bond market is largely rallying
- European stocks are advancing across the board with the Euro Stoxx 600 up 0.39%, the FTSE 100 gaining 0.46%, the DAX rising 0.40%, and the CAC 40 up 0.34%
- Information technology (+1.36%), materials (+0.60%), and consumer staples stocks (+0.54%) are the biggest outperformers in the Euro Stoxx 600
- Telecommunications services (-1.11%), and energy stocks are the largest decliners in the Euro Stoxx 600
- Market breadth for the Euro Stoxx 600 is decidedly positive with 386 stocks advancing compared to 197 declines
- Volume across European markets is 12.95% below its 10-day average
- Eurozone industrial production fell 1.7% Y/Y in April, in sharp contrast to forecasts for a +2.8% growth rate
- UK CPI growth for May matched the consensus (+2.4% Y/Y vs +2.4% estimates).
- Switzerland’s May PPI was in-line with expectations (+3.2% Y/Y vs +3.2% Y/Y projected), and was higher M/M (+2.7% PPI in April)
Highlights from the European Bond Market
- Italian bonds are rallying with the yield on Italy’s 10-year down 8.0 basis points to 2.743%. There was strong demand in Italy’s debt auction today, as the Italian government sold $6.6 billion worth of notes, with terms ranging from 3 to 30 years
- Yield on the German Bund has declined 0.5 basis points to 0.483%
- UK sovereign treasuries are higher today as the yield on the UK 10-year has fallen 2.7 basis points to 1.368%
- French 10-year bonds have a positive bias, with the yield on France’s 10-year down 2.9 basis points to 0.842%
What is Going on with European Currencies?
- GBP£ is 0.34% weaker, to GBP£1.3327/USD$, as turbulent Brexit negotiations continue to push the currency lower
- EUR€ has gained 0.08%, to EUR€1.1753/USD$, as the market expects a divergence between Fed and ECB interest rate policy
- SEK has risen 0.20%, to SEK0.1158/USD$
Euro Stoxx 50 Movers
In local currency.
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