European investors have reacted positively to the continued strong US corporate earnings and economic data while remaining wary of any escalation in the global trade war between the US and China and other allies. The auto sector was one of the strong sectors on continued hopes that high tariffs will not be placed on exports to the US. In the banking sector Commerzbank reported a higher profit than expected but said costs would be higher next year and the stock price fell. Italian bond market is also recovering from the correction levels seen in previous months and this is improving sentiment for Italian banks.
Latest prices show the MIB at 21828 up 1.24% , the FTSE at 7737 up 1.01% , the CAC at 5524 up 0.87% and the DAX at 12703 up 0.82%.
In the FX market we have seen the US Dollar fall away from near 12 month highs seen yesterday for no clear reason other than positioning . The EUR is at 1.1595 up 0.36% , the GBP is at 1.2957 up 0.11% , and the JPY is at 111.15 stronger by 0.22%. The DXY as mentioned is lower 94.94 down 0.25%. Spot gold is higher by 0.62% at 1214.60. Brent Crude is at 74.78 up 1.41% as the US imposes sanctions again on Iran .
In the bond markets the US 10 is steady at 2.95% , the UK10 is at 1.31% up 1 , and the GE10 is at 0.40% flat.
In economic data we have seen German construction output drop 3.2% last month and total industrial output down by 0.9% as well as manufacturing output down 0.8%.