European markets have fallen back this morning as corporate earnings continue to send mixed messages ahead of a Euro zone industrial report that is tipped to show a drop in output for September. Some investors are also beginning to turn their heads more to the potential deflation risk in the Euro zone. The initial rally on the latest ECB cut may well be a predictable reaction, but this was in part forced by the shock drop in last months’ inflation numbers which could lead to a very different market move if not controlled. Should deflation risk continue to hit headlines, the expectation would be money flows out of equities and back into the protection of bonds. Whilst you can hardly call todays’ market reaction a panic, deflation concerns just adds more weight to a potential pullback, especially in the context of recent all-time highs and a taper scenario that will inevitably kick into action in the next few months regardless of exact timing. ICAP stock was buoyant this morning despite reporting half year revenues down 1% to miss expectations, after a report stated the interdealer broker has no reason to believe that any of its employees are involved or linked to the apparent manipulation of FX markets. The probe from UK regulators has already seen the suspension of employees at both RBS and Barclays and will no doubt lead to hefty penalties for the banks if found guilty. Given its role as an intermediary between the Banks, some would have feared that this could be a repeat of the LIBOR story which saw the firm fined $87 million, but it appears the vast majority of FX business is done on electronic platforms, perhaps clearing them of any potential knowing involvement. Profits for Q3 at Carlsberg came in better than expected, prompting the Danish brewer to re-affirm earnings expectations despite a cut in its outlook for the Russian beer market. Yesterday the firm also announced the appointment of former Heinz executive Christopher Warmouth to head up its Asian division to try and cash in on high growth markets in a bid to offset the much publicised weakness in Europe. E.ON has warned today that a shift towards renewable energies in its native Germany is hampering earnings, with net profit for the first 9 months of the year down 3%, albeit fairly in line with forecasts. The firm will look to stride forward with its own renewable projects, notably its high performance wind farm in the Baltic sea, and continue to cut costs at mainstream power plants to try to ride the change in tide in the industry. They recently joined the ranks of the rest of the UK Oligopoly to announce a 6.6% increase in energy prices which has prompted calls for more regulation and transparency in the industry to try and protect consumers. News of a profit & sales miss from maintenance firm Brammer was enough to hammer the stock down over 13% on the open. The move comes on the back of sales of £220m, down £10m on forecasts, leading to a £3m reduction in trading profits. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.