Europe midday: Stocks rise amid strong fund flows, economic data
By Alexander Bueso
Date: Friday 28 Apr 2017
(ShareCast News) - European stocks were seeing some buying interest after data showing inflows into euro area stocks were at their strongest since December 2015 and following the release of several stronger than expected reports on the Eurozone economy, including on money supply dynamics and consumer prices.
As of 11:46 GMT the benchmark Stoxx 600 is still off, slipping 0.18% lower to 387.10, while the German Dax is edging higher by 0.06% to 12,450.06 and the Cac-40 is up 0.15% at 5,279.36.
According to strategists at Bank of America-Merrill Lynch, capital flows into euro area shares this week were at their highest since December 2015.
"2017 total returns for both [global] stocks & bonds impressive in face of Trump disappointment, EU politics, peak PMI narrative...best explanation = $1tn YTD central bank liquidity supernova...bull market unlikely to end until bullish macro makes CB's tighten ... not yet there," the strategists said.
Equity inflows hit $3.4bn, double the previous week's result, Jefferies said referencing data from EPFR, with flows to France and Germany running at 21-year highs.
In parallel, euro/dollar is ahead by 0.52% to 1.0929 and the yield on the 10-year German bund by five basis points at 0.34%.
Consumer prices in the euro area accelerated from a 1.5% year-on-year clip in March to 1.9% for April, alongside an increase in 'core' prices from 0.7% to 1.2% (consensus: 1.0%), Eurostat said.
Just the day before, European Central Bank president Mario Draghi said the outlook for only "gradual" price pressures at the core level in the medium-term justifies maintaining a 'dovish' policy stance.
Nevertheless, economists say the implications of today's data are fleeting given, among other things, the likely distortions around Easter.
Also worth noting, the flow of credit to the euro area's private sector accelerated from an annualised pace of 2.6% in February to 3.2% for March, ECB data revealed.
Over that same time span, the three-month moving average for the Eurozone's M3 money supply rose from 4.7% to 4.9%.
Acting as a backdrop, US president Donald Trump warned that a "major, major" conflict with North Korea was possible although he preferred a diplomatic solution.
Still on the economic calendar for Friday are US first quarter gross domestic product figures at 13:30 GMT, followed by the release of the Chicago PMI at 14:45 GMT and the University of Michigan's consumer confidence gauge at 15:00 GMT. Later in the evening, at 19:00 GNT Baker Hughes will release its weekly tally of US oil rigs.
Shares in UBS are flat despite posting an 80% jump in first quarter earnings thanks to robust profits at its wealth management and investment banking arms.
German's Thyssen Krupp is looking to sell submarines to Indonesia via a joint-venture with a Turkish partner, according to Handelsblatt.
Italy's Atlantia will sell 10% of its motorway unit to a group of investors including Allianz for €1.48bn.
French drugmaker Sanofi posted better-than-expected first quarter profits.
French construction group Vinci's revenues jumped 5.1% over the first three months of the year.
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