Financial stocks help European bourses stay positive

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European stocks ticked higher on Monday, with financial stocks providing the bulk of the support, with prominent gains for Deutsche Bank after an FT report that the German lender was to create a bad bank to house underperforming assets.

Deutsche was the top performer on Frankfurt’s Xetra Dax 30, with shares in the company up almost 2 per cent against a rise of 0.2 per cent for the index. The Europe-wide Stoxx 600 was higher by 0.1 per cent, with the index tracking its banks up 0.9 per cent.

London’s FTSE 100 ticked up 0.1 per cent and the CAC 40 in Paris rose 0.3 per cent.

Attention was also turning to a significant roster of central bank meetings this week, due to test perceptions of the dovish tack taken recently by a series of global monetary policymakers.

The US Federal Reserve’s policy statement is due on Wednesday. The Bank of Japan and Bank of England will make their own policy decisions on Thursday, with central bankers in Thailand, the Philippines, Indonesia and Thailand also due to meet the same day.

In the meantime, there was a pause in the wider rally for eurozone government bonds after it took yields to a series of record lows last week on demand for the relative safety of the debt, in line with concern about the outlook for global growth. Germany’s 10-year Bund, seen as Europe’s safest debt, was steady, yielding minus 0.255 per cent, locking in a loss for investors holding it to maturity. The US 10-year Treasury yield ticked up 1.7bp to 2.1115 per cent.

The cautious feel to sentiment lingered as investors also kept watch on the trade dispute and geopolitical tension in the Middle East. Brent crude came off a two-session rally after an attack on two oil tankers near the Straits of Hormuz stoked worries about potential supply disruption. The international marker, which had traded around some of its weakest level of 2019 before the incident, fell 0.5 per cent to $61.71 a barrel.

S&P 500 futures were pointing to gains of 0.1 per cent when Wall Street opens later on Monday.

Coming up

  • 13.30: NY Fed manufacturing data (London times)

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Markets Briefing is a concise look at global markets, updated throughout the trading day by Financial Times journalists in Hong Kong, New York and London. Feedback? Write in the comments below or send us an email.

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