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Europe stronger as Catalan situation cools

spain spanish map

spain spanish map

Stock markets in Europe are in positive territory as the political situation in Spain has cooled somewhat. 

The German market is closed today as the country celebrates Reformation Day, and with a major market on holiday, we could see relatively small trading ranges today.

BP had a strong third-quarter as underlying profits doubled. Oil and gas production rose by 14% in the third-quarter. Now that Brent Crude oil is north of $60 per barrel, ramping up of production will stand to BP in future earnings releases. To sweeten shareholders, BP announced a $1.6 billion share buyback scheme, investors have been patient with the oil giant ever since the Deepwater Horizon disaster. The share price is up 3.2%.  

Shares in Ryanair are up 5.2% after the airline posted an 11% jump in first-half profits, and the company kept its full-year guidance unchanged – despite the scandal surrounding pilots pay and cancelled flights. Industrial relations have improved and the cost base is anticipated to tick up by €100 million on account of the pay dispute. The true impact of the flight cancellations debacle will be discovered down the line, as it is a possibility that some customers could be put off Ryanair permanently.    

Weir Group shares are down 4.8% after the company stated its operating profits would be ‘slightly’ lower than previously anticipated. The company saw a 56% rise in third-quarter oil and gas orders – so the business is in rude health but whenever a company warns on profits, investors bolt for the door. Jon Stanton, the CEO described the energy sector as ‘challenging’ – this added to the negative sentiment.

GBP/USD is largely unchanged this morning and there are no major economic announcements expected from the UK today, so volatility could be low. Traders are counting down to the Bank of England (BoE) meeting on Thursday – and it is likely we will see a rate hike.

EUR/USD is a touch in the red this morning after a small bounce back in the US dollar. The greenback slipped yesterday afternoon after it was relieved that Mr Trump’s tax reforms might be gradual. This morning, French GDP remained steady and inflation ticked up to 0.9% on a month-on-month basis.

We are expecting the Dow Jones to open 36 points higher at 23,384, and we are calling the S&P 500 up 3 points at 2575.

At 1pm (UK time) the US will announce the Case Schiller house price index, and the consensus is for a month-on-month reading of 0.3% and a year-on-year reading of 6%. At 1.45pm (UK time) the Chicago PMI report will be released, economists are expecting a reading of 61.

Electronic Arts, Kellogg, MasterCard, and Pfizer will announce their quarterly results today.

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