Europe midday: Stocks little changed ahead of vote in UK parliament
By Alexander Bueso
Date: Tuesday 15 Jan 2019
(Sharecast News) - Stocks on the Continent are little changed shortly after the mid-point of the session, helped by more positive news out of Germany and China, although investors are cautious ahead of the British parliament's vote on the Prime Minister's withdrawal plans later in the day.
According to Germany's Ministry of Finance, the country's economy expanded by 1.5% in 2018, after recording "a small plus" over the last three months of last year, putting paid to speculation that it fell into a technical recession.
For Holger Schmieding at Berenberg, Germany's fundamentals were "solid enough" that its highly cyclical economy would "bounce back nicely" once the uncertainty around trade wars, the Chinese correction and a possible hard Brexit faded.
"We expect that to happen from spring 2019 onwards after a grey winter," he said.
As of 1254 GMT, the benchmark Stoxx 600 was dipping by 0.06% or 0.29 points to 347.25, alongside a drop of 0.42% or 80.05 points to 19,091.94 for the FTSE Mibtel and a decline of 0.30% or 32.81 points to 10,823.05 for the German Dax.
Euro/dollar was retreating 0.38% to 1.14252, alongside a three basis point fall on the yield for the benchmark 10-year German bund to 0.20%.
Front month Brent crude oil futures meanwhile were up by 1.387% to $59.82 a barrel on the ICE.
Meanwhile, in China, its central bank released better-than-expected data on credit growth, although money supply growth continued to languish after authorities moved to curb local government bond issuance.
Freya Beamish at Pantheon Macroeconomics believed the Asian country's authorities had already done enough "to ensure a recovery".
Nevertheless, she added that: "economic activity is set to get weaker before this feeds through, not until well into the second half. In the meantime, the PBoC will get scared and cut rates, particularly now that the Fed now looks likely to pause in March."
At the euro area level, Eurostat reported that in seasonally adjusted terms the bloc's trade surplus increased from €13.5bn (Preliminary: €12.5bn) for October to €15.1bn in November (consensus: €12.6bn). According to economists, a 1.9% month-on-month drop in the single currency bloc's imports buoyed the outcome, with the fall in crude oil prices likely to have played a role.
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