17 February 2017 at 12:48 GMT
European stocks have taken a tumble following Royal Vopak's disappointing earnings release this morning. The upcoming French elections and their possible implications naturally continue to dominate across Europe also.
Meanwhile, the dollar is the only major currency to have seen gains today while gold has reached a high of $1,242/oz.
Watchlist (all times GMT)
- US Leading Indicators (1500)
- Baker Hughes Weekly Rig Count (1800)
USD has had mixed fortunes but is still faring better versus GBP and EUR. EURUSD is down to 1.0650 while EURGBP is up to 0.8575. EURSEK also climbed to 9.4825 on the back of today's release of Swedish inflation figures for January.
FX Options volatilities
A risk-off reaction in the market on the back of political developments in France, ahead of the elections, has given a boost to volatilities.
EURJPY: The curve has been well bid all morning. Front end has rallied, but is still affordable, but the risk around the French elections has increased a fair bit and feels like there is much more to go.
USDJPY: Vols traded a spread higher this morning and risk reversals have moved towards USD puts again. We saw strong interest for 2-week – 1-month 110.00 puts during the sell-off in spot.
EURUSD: Vols around the election event traded higher following the political comment from France. Front end vols traded higher as well, but we are already starting to see it trading lower again. There has been decent buying interest for 1-week 1.0700 (and similar) strikes this morning.
European stocks dropped as Dutch storage company Royal Vopak NV disappointed after its earnings release. The Stoxx Europe 600 fell 0.5% to 368.20.
Royal Vopak slumped 8% after the provider of storage for the oil and chemicals industries said 2017 earnings before interest, tax, depreciation and amortization “will not exceed the 2016 result.” The stock was the Stoxx 600’s biggest decliner.
On the upside, Segro gained more than 3%. The U.K.-based real estate trust that owns warehouses posted a drop in 2016 pre-tax profit, but said demand is holding up and hiked its dividend.
Allianz rose almost 2% after the German insurance company raised its dividend, launched a buyback program, and outlined the continued recovery of its US fund manager Pacific Investment Management Co., or Pimco.
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.
Royal Vopak's disappointing earnings report has seen the company's share price drop 8% and European stocks have taken a tumble alongside it. Photo: Wikimedia Commons