· Profit taking related flow following yesterdays FOMC inspired gains dominated the price action in Europe this morning.
· Gold remains above USD 1,300 level, with analysts at UBS noting that yesterdays surge was short-term trend.
· No tier-1 data releases on tap later, but today marks the quadruple witching day and the S&P rebalance.
With little in terms of tier 1 macroeconomic releases, meant that profit taking related flow following yesterdays FOMC inspired gains dominated the price action in Europe this morning. At the same time, policy divergence between the BoE and the ECB ensured that Gilts underperformed Bunds, with 10y UK/GE bond yield spread touching on its widest level since mid-1997.
Stocks recovered off the lowest levels of the session, but remain mixed, with financials among the worst performing sector. Italian banks are in focus this morning, with Banca Monte dei Paschi shares under pressure as it is last day of trading for the company's rights issue. In terms of other equity specific news, Shire shares surged in London after AbbVie confirmed that it made an indicative offer to the Co. of GBP 46.26/Shire Shr. Although it was subsequently confirmed by Shire that it rejected the offer and that talks between the two companies are off.
Of note, today marks the quadruple witching day and the S&P rebalance as well as EU index changes and expiries.
Gold prices declined today after rallying over 3% yesterday on touted short-covering, with silver prices also lower having advanced 5% yesterday following somewhat dovish FOMC decision late Wednesday. Elsewhere, WTI and Brent crude futures reside in minor negative territory, with little related news flow to guide price action and no notable updates from Iraq.