European equity markets are a mixed bag this morning; some indices are marginally in positive territory, while others are fractionally lower, but the common theme is low volatility. London’s higher exposure to commodity-driven stocks has given it an edge over its continental counterparts.

Miners like Rio Tinto and BHP Billiton are still benefiting from China’s massive infrastructure announcement over the weekend, and oil titans such as BP and Royal Dutch Shell are buoyed by Saudi Arabia and Russia's collusion in the crude oil market. Both nations are keen to keep the cut in oil production until March 2018, in a bid to maintain higher prices.  

EasyJet is suffering this morning after revealing a widening of its first-half loss. Rising revenue and a record number of passengers in the six-month period were not enough to offset the impact of the weaker pound. The stock is up 44% since the October 2016 low, and the airline stated that summer bookings are up on last year so Brexit clearly isn’t impacting every aspect of its business. 

Vodafone are in demand this morning despite reregistering a €6.1bn annual loss. The telecoms company wrote-off a large loss in its Indian operation but traders focused on the increased dividend and rosy outlook for next year. 

Sterling spiked after the UK released strong CPI numbers, the headline number came in a 2.7%, which is well above the Bank of England’s (BoE) 2% target, and the core figure jumped from 1.8% in March to 2.4% in April. The weakness in the pound since the EU referendum is largely behind the jump in the cost of living, but some BoE members will not ignore these figures.  

Across the pond, we are expecting the Dow Jones to open 10 points lower at 20,971 and we are anticipating the S&P 500 to open at 2399, down 3 points from last night's close. Home Depot and Dick’s Sporting Goods are the highlights of the earnings releases from the US today, and in terms of economic data, dealers will be focused on April’s building permits and housing starts reports.


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