European update – Markets lacking a catalyst

Markets mixed after relaxing bank holiday

It’s been a slow start to the trading week following the long bank holiday weekend, with European markets once again mixed and US futures offering little of more interest.

Source – Thomson Reuters Eikon

The lack of direction at the start of the week isn’t surprising given the quiet bank holiday weekend but thankfully, things should pick up. Earnings season has got off to a better than expected start and we have a large number of companies reporting over the next few days. It’s still expected to be a challenging quarter for the corporate’s but the bar has been sufficiently lowered which may allow them to get through the season relatively unscathed.

While annual earning’s growth is expected to be negative in the first quarter, expectations are low enough that companies are beating expectations at an above average rate, as reported by Factset. This may support markets in the near-term but not enough to avoid an earnings recession this year.

Source – Factset

In the UK we’ve been granted a short break from Brexit – to everyone’s relief – which means news flow is light. The economic calendar is also a little bare, with a couple of central bank meetings – BoJ and BoC – and US GDP this week the only standout events. It’s perhaps no surprise then that people have become far more interested in the oil markets, one of the few areas where we are seeing some activity as Iranian oil wavers near expiry.

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.

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