27 January 2017 at 12:10 GMT
After reaching their highest levels in over one year Thursday, European equity indices are tracking lower while remaining on track for a weekly advance. Notable outliers include UK grocer Tesco, whose shares gained by over 8% following its announcing that it will acquire foood wholesaler Booker in a £3.7 billion deal, and UBS which dropped by 3.4% after total operating income at its wealth management division fell by 5% in the fourth quarter of 2016.
Today's calendar sees the US publishing advance Q4 GDP data at 1330 GMT and durable goods at the same time with analysts expecting a 2.5% gain in the latter.
On the diplomatic and geopolitical front, USDMXN is retreating somewhat after Thursday's dramatic spike in the wake of the cancellation of a meeting between the two countries' leaders over president Trump's controversial border wall plans.
- US Q4 Advance GDP (q/q 2.2% exp., 1330 GMT)
- US Q4 Personal Consumption (2.5% exp., 1330 GMT)
- US December Preliminary Durable Goods Orders (+2.5% exp., 1330 GMT)
- US Jan Final Michigan Confidence (98.1 exp., 1500 GMT)
A relatively calm FX session with trading a little muted ahead of today’s key macro releases from the US.
The USD Index extended the retracement off 100 support level hit yesterday to current 100,6, being ca. +0,2% daily gain.
EURUSD traded neutral, locked in the narrow range between 1.066 and 1.068. USDJPY erased part of the morning's gains, however still holding above the 115 level as the Bank of Japan announced the increase in its purchases of 5-10 year sovereign maturities.
FX Options volatilities
European stocks pulled back from their highest levels in more than a year Friday, with UBS Group PLC shares down following the Swiss lender’s financial update, but the broader market is on track for a weekly advance. The Dax 30 shed 0.3%,CAC 40 fell 0.7%, IBEX dropped 0.9% and FTSE 100 was flat.
Sector wise, consumer services and consumer goods sectors were trading flat, but financial, telecom, and healthcare shares were moving lower.
UBS dropped 3.4%. The Swiss bank said total operating income at its wealth management unit fell 5% in Q4 compared with the same period a year earlier. While net profit fell to 738 million Swiss francs ($737.26 million), that result was better than analysts had expected.
Tesco jumped 9%, aiming for its largest percentage gain since January 2015 after the supermarket chain reached a deal to buy food wholesaler Booker Group PLC for £3.7 billion ($4.66 billion). Tesco also said it’s planning to start replay dividends in fiscal 2018.
Booker Group Plc topped the Stoxx 600 by soaring 15.8%, and moved toward its largest daily gain since October 2008.
Banco de Sabadell fell 1.2% as the Spanish bank said fourth-quarter net profit fell 51%, hurt by higher provisions to cover the cost of court-ordered reimbursements to mortgage borrowers.
Investors will watch for an update on trade talks Friday between UK prime minister Theresa May and US president Donald Trump when the two meet in Washington.
The replay of our Morning Call can be found here.
Mid-session Europe is part of TradingFloor's stable of commentary running through from the US close, through Asia to the European session. Click below to keep abreast of all the developments as they happen.
UBS HQ in Zurich: the bank's shares fell by over 3% on a poor Q4 showing
from its wealth management unit. Photo: Shutterstock
— Edited by Michael McKenna