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EUROPEAN MIDDAY/US MORNING REPORT: MONDAY – 8TH – OCTOBER – 2018 October 08, 2018 at 11:30AM

EUROPEAN MIDDAY/US MORNING REPORT: MONDAY – 8TH – OCTOBER – 2018

 

EUROPEAN MIDDAY/US MORNING REPORT

MONDAY – 8TH – OCTOBER – 2018

European cash equity markets are broadly lower ahead of the midway stage (FTSE -0.4%, DAX -0.7%, CAC -0.7%, FTSE MIB -2.4%). Auto related stocks are among the worst performers amid reports that EU lawmakers could
soon impose tougher-than-expected emissions caps. Banks have also underperformed, most notably in Italy where two-year yields have spiked twenty-two basis points this morning to their highest level since June. The EU Commission raised concerns over the weekend
with regards to the Italian budget but the populist coalition is refusing to back down. Deuty PM Salvini said this morning that they will not backtrack on budget plans regardless of market pressure. Risk aversion has pushed core European yields lower meanwhile,
as did weaker than expected German industrial production and Euro Zone Sentix investor confidence. Turning to currencies, the Dollar Index is ahead and just shy of the 96 handle but the Japanese Yen has taken the G10 top spot while the Canadian Dollar is the
weakest. Oil prices are also firmly in the red with US crude futures and Brent down over one-percent. Spot gold has lost -0.8%. Looking ahead, it could be a quiet afternoon with some US markets closed for Columbus Day. Futures are pointing to a lower open
on Wall Street.

Key Headlines/Data:

*  Parisen: French PM Philippe could resign today.

*  Swiss Unemployment Rate SA (Sep) 2.5% versus 2.5% expected, previous 2.6%

*  Norwegian Manufacturing Production M/M (Aug) -0.1% versus -0.2% expected, previous +0.9%

*  German Industrial Production Data (Aug):

  • Industrial Production M/M -0.3% versus +0.4% expected, previous -1.1%
  • Industrial Production Y/Y -0.1% versus -0.1% expected, previous +1.1%

*  Bank of France Industrial Sentiment (Sep) 105 versus 102 expected, previous 103

*  Speaking at a press briefing with Chinese Diplomat Wang, US Secretary of State Pompeo said the US and China have a fundamental disagreement. Wang meanwhile said they view US actions as a direct attack on mutual
trust that has cast a shadow over US relations.

*  Euro Zone Sentix Investor Confidence (Oct) 11.4 versus 11.7 expected, previous 12.0

*  Italian Deputy PM Salvini said Juncker and Moscovici are enemies of the people. He also assured that a Euro exit is not on the agenda. He later stated that they will not backtrack on budget plans regardless
of market pressure.

*  St Louis Fed President Bullard said the US will need to see faster productivity growth to maintain GDP growth rates.

 

Read More: EUROPEAN MIDDAY/US MORNING REPORT: MONDAY – 8TH – OCTOBER – 2018

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