European Equity Market Handover: Stock market snapshot as of [28/5/2019 2:13 PM]
- A dearth of new developments on the U.S.-China trade front increases focus on a confluence of events in Rome
- Chiefly, these are widening coalition fractures, a strengthened Northern League following EU elections and a European Commission triggered by Italy’s failure to follow debt and budgetary prescriptions. A multi-billion euro fine may follow
- Italy’s volatile yields are back on the rise. The closely watched 10-Year rate has added more than 184 basis points since the end of last week to stand around 2.70%. It peaked at 2.8% a fortnight ago
- Markets are thereby set to go back in thrall to Italian yields after their elevation a year ago coincided with some of the most eye-catching European stock index whipsaws for years
- Germany’s benchmark yield spread to Italy’s duly widens. The U.S. Treasury rally gets fresh legs, sending the 10-Year rate to a 19-month low
- Still, a surprise swing higher in an EU economic confidence gauge, earlier—with weak trimmings—helps keep a floor under shaky indices
- Like some European cash markets, S&P 500 mini futures were flirting with positive territory near Wall Street’s open
Corporate News
- Shares in Italy’s fragile banks have slumped, including a 3% drop by FinecoBank (MI:FBK) and weakness across other large lenders like Mediobanca (LON:0HBF), UniCredit (LON:0RLS) and Intesa Sanpaolo (LON:0HBC)
- Persistent contagion fears return, weighing heavyweights further afield like Societe Generale (LON:0J6Y) which was down about 2% a while ago
- Fiat (LON:0QXR), whose merger news offered positive global market distraction on Monday adds a little more to double-digit percentage gains a day earlier. This helps the car & parts sector to a second positive session too
- Deepwater contractor Seadrill could be among the sharpest S&P 500 fallers at open, as it tumbles 15% in pre-market deals following a brokerage downgrade
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