The risk off tone from American and Asian trade has led into European equity markets with 9/10 Stoxx 600 sectors trading in the red. Much anticipation is set to be on tomorrow’s ECB decision, with range bound trade evident across EU markets. Stock specific news sees UK homebuilders underperforming, with Barratt Developments down 3.4%, as some analysts point towards the company’s poor outlook. Elsewhere sees insurance names underperform amid the hurricane concerns growing across the US.
Consolidation has been the theme as we approach Draghi tomorrow; with bunds interested in a gap fill, trading around yesterday’s low. The lack of direction shows in EZ/UK 10y yields, largely unchanged, as gilts await any French Brexit news or any further North Korean developments.
The Spanish German spread is wider by 2.20 bps, ahead of supply tomorrow, supported by The Catalan Speaker’s Committee voting 5-2 in favour of debating the referendum bill in Catalan parliament.
USD/JPY has been the pair to watch, as Japanese buying interest has been touted around the 108.50 level, which has held throughout the session. Further support is likely around these levels with YTD lows ahead of 108.
The aforementioned hurricane concerns in the US have led to the continued bid in oil markets, as WTI looks toward USD 49.00/bbl. Oil trade in Asia has led to snapping up crude cargoes from the US after the closures, with possibly more closures inevitable.