EU MID-SESSION UPDATE - The week kicks off with a Dovish ECB inspiring gains in Bunds and European equities amid a light
In what has been somewhat of a subdued morning, European bourses kicked off the week in negative territory albeit mildly so, with the usual culprits, material and energy names leading the losses for the majority of the morning. However, the DAX index moved to fresh session highs by mid morning having tripped stops at the 10,000 level and as such European equities have pared their earlier losses. Additionally, outperformance has been observed in the FTSE MIB (+1.1%) amid gains in tech giant Telecom Italia (+2.1%) who announced that their CEO is to step down.
Bunds have been extending on gains to move ever so closely to the 163.00 level following relatively dovish commentary from ECB’s Liikanen and Villeroy, alongside this the yield curve has seen some notable flattening.
Elsewhere, price action in FX markets have been dictated by the broad strengthening in the USD-index subsequently continuing its retracement from last week’s FOMC meeting. In turn, EUR and GBP has been dampened with the latter also suffering from a political front after Iain Duncan Smiths resignation in which could be seen as a ploy to strengthen his ‘Brexit’ campaign.
WTI and Brent crude futures trades in negative fashion as prices continue to pull away from their recent YTD highs amid the upside in the greenback, however since the European open oil has come off worst levels.
Highlights today include US existing home sales alongside speeches from Fed’s Bullard and Lockhart.
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