UK June Retail Sales June surprised to the upside

European equities started the day on a strong footing, supported by constructive earnings and dipped only temporarily during the ECB press conference. Daily gains of the Euro Stoxx 50 hover around 0.50%. American markets also opened in positive territory but gains are more limited than in Europe.

Unsurprisingly, the ECB left its policy rate unchanged and maintains the pace of bond purchases. ECB present Draghi maintained a soft assessment. He acknowledged that the euro's strength "received some attention" and said a sudden change in financing conditions would be "the last thing the governing council wants". He also said "financing conditions remain broadly supportive to secure a sustained return of inflation rates towards our inflation aim".

UK June Retail Sales June surprised to the upside, helped by warm weather conditions and early timing of the Muslim festival of Eid. Retail sales excluding auto fuel rose 0.9% M/M (3.0% Y/Y) while only a 0.5% rise was expected (2.5%). In the previous month, retail sales had declined by 1.5%.

The weekly initial jobless claims in the US came in better than expected at 233K while 245k was expected, confirming healthy labour market conditions.

The Philadelphia Fed's headline General Business Activity index declined more than 8 points from 27.6 in June to 19.5 in July. Consensus expected a smaller decline to 23. The number however still points to solid expansion. The survey also showed that price pressures moderated but price expectations for the six months to come rose.

EU and UK negotiators ended their four-day round of talks today with little common ground found on the role of the European Court of Justice, the divorce bill or the Irish soft border. The clock is ticking on Brexit but talks on the free-trade agreement have to wait until "sufficient progress" has been made on the above mentioned issues.