EU MID-SESSION UPDATE: European equities trade higher amid the broad-risk tone with mining names top of the board
European equities have kicked off the session on the front-foot (Eurostoxx 50 +0.5%) with all ten sectors in the green. In terms of sector specifics, material names lead the way higher amid positive earnings updates for Antofagasta (+4%) and BHP Billiton (+3.2%) amid positive pre-market earnings updates, subsequently dragging the sector higher. Elsewhere, Provident Financial (-50%) are the notable underperformer amid their CEO resigning, second profit warning and scrapping of dividend. Finally, Fiat (+1.2%) remain supported by ongoing interest from Great Wall Motor.
Fixed income markets trade lower amid the apparent return of risk-sentiment to the market with today’s sovereign bond-slate once again void of supply. Bunds have somewhat ran out of steam after yesterday failing to target the Aug 11 high with markets now awaiting ZEW and the GE 10yr supply tomorrow. Additionally, some are attributing the pressure on peripheral markets to ongoing speculation about a potential parallel currency in Italy but details are yet to emerge on this front.
In FX markets, prices have been subject to a risk on tone, which has seen JPY and CHF ease off against the greenback with the JPY also consolidating above 109. Of note, large expiries in USD/JPY are set to roll off at the NY cut with 1bln at 108.50 and 798mln at 109.00. For EUR, the move above 1.18 had been brief after the currency ran into resistance at 1.1825. Again, it has been a relatively quiet morning with participants eagerly awaiting President Draghi’s speech in Frankfurt, in the short term however, German ZEW scheduled for 10:00 could dictate price action.
WTI and Brent crude futures trade higher, paring back some of yesterday’s losses which were in part triggered by the resumption of operations at the Deere Park refinery. Of note, the OPEC monitoring committee stated that compliance for their deal is currently running at 94%. However, this appears to be very much at odds with recent numbers produced by IEA, stating a compliance level of just 74%. Elsewhere, the risk-appetite has taken the shine modestly off gold prices while Chinese iron ore futures were seen higher by over 5% during Asia-Pac hours.
22 Aug 2017 - 09:45- Important- Source: RANsquawk
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