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European Closing Report 09 Apr 2018

European cash equity markets are little changed at the closing bell have pulled back from their best levels this afternoon (FTSE 0.0%, DAX +0.1%, CAC 0.0%).

European Closing Report (by Sigma Squawk)

The Euro Stoxx 600 hit its best level in almost three weeks in the early exchanges but saw gains dissipate through the day with basic resources showing notable under-performance. 

The ongoing US-China trade dispute and inflammatory rhetoric from Russia with regards to US sanctions and Syria have all likely played a part in dampening risk sentiment this afternoon. Wall Street has been more resilient however with gains of over one-percent for the major bourses as we write; energy stocks are among the best performers as oil prices rise over two-percent on the increase in geopolitical tensions. 

In fixed, core EU bonds and Treasuries are both offside although rising US yields have done little to support the Greenback with the Dollar Index nursing a modest loss amid a quiet North American data slate – the US employment trends index did rise to 107.7 from 107.3. Elsewhere in FX, the New Zealand Dollar is among the best performers while the Canadian Dollar recevied a boost in recent trade after positive NAFTA comments from White House adviser Kudlow. 

At the ECB, President Mario Draghi called on the Governing Council to be patient and prudent in its approach to monetary policy. He said he was confident that inflation will move higher but is uncertain about the potential for economic slack. We also heard from Vice President Constancio who said they have confidence that inflation will continue to evolve but added that they should be cautious in order to avoid that some early, strongly restrictive policy could derail this development.

Key Headlines/Data:

* Swiss Unemployment Rate (Mar) 2.9% versus 2.9% expected, previous 2.9%

* German Trade Balance (Feb) €19.2 Bln versus €21.4 Bln expected, previous €21.3 Bln revised to €21.5 Bln
– Exports MoM -3.2%
– Imports MoM -1.3%

* UK Halifax House Price Data (Mar):
– House Price Index 3M/3M +1.5% versus +0.2% expected, previous +0.4% revised to +0.5%
– House Price Index 3M/YoY +2.7% versus +2.1% expected, previous +1.8%

* Euro Zone Sentix Investor Confidence (Apr) 19.6 versus 21.1 expected, previous 24.0

* According to sources, China re said to be looking at devaluing their currency as a tool in their dispute with the US.

* Russian PM said they deserve the right to take steps towards retaliation against US sanctions, adding that they are unacceptable and illegitimate.

* BoJ Governor Kuroda said they will continue with powerful easing to reach their inflation target. He argued that it is too soon for the BoJ to be discussing their exit strategy and also said it is important to commit to an inflation overshoot.

* ECB President Mario Draghi said the ECB should be patient and prudent in its approach to monetary policy. He said he was confident that inflation will move higher but is uncertain about the potential for economic slack.

* ECB Vice President Constancio said they have confidence that inflation will continue to evolve but added that they should be cautious in order to avoid that some early, strongly restrictive policy could derail this development.

* US Employment Trends Index (Mar) 107.7, previous 107.7 revised to 107.3

* Senior White House adviser Kudlow said he does not know whether the US will impose tariffs on China or if the dispute will be settled via negotiations. He did add that he was an optimist. On NAFTA, he said good progress is being made and also said that there should be more North American currency coordination.

* Bank of Canada Senior Loan Officer Survey (Q1) -5.2, previous -6.4):
– Inflation expectations over the next two years have picked up.
– Remaining slack confined to energy producing regions.
– Forward-looking sales indicators remain positive across most regions and sectors.



 


 





 






 



 








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