Oil Prices Bounce Driving Stocks Higher; But FTSE Lags as Brexit Begins

European stock markets are down from earlier highs and markets are struggling, with the DAX still holding on to a gain, while the FTSE 100 is now slightly in the red. Markets initially moved higher, following on from a largely positive session in Asia, where the ASX managed to extend Tuesday’s gains as a stronger than expected U.S. consumer confidence hit a 16-year high. Markets are still set for a fifth straight monthly gain, and in Europe DAX and FTSE 100 remain at high levels, but investors are cautious as the U.K. hands in the divorce papers to the EU.

EU officials had to wait 9 months, but the U.K. is finally ready to trigger Article 50 today, which will start the process to review a total of 20,833 laws and regulations that were in effect in the EU and Britain at the beginning of the year and that will now have to be reviewed or replaced.

Oil prices moved higher as disruptions in a pipeline saw reduced output in OPEC member Libya, which helped to counter concerns about the U.S. surplus that shows little signs of diminishing. Libya’s output was reported to fall short by about 500,000 barrels a day after the pipeline from Sharara field stopped operating. WTI futures rose to a high of USD 48.84 per barrel before falling back to currently USD 48.66 per barrel.

The EU blocked Deutsche Boerse-LSE merger. EU regulators seemed to send a clear signal against further EU-UK integration by announcing the block of Deutsche Boerse AG’s planned takeover of London Stock Exchange Plc on the same day as the U.K. will hand in the divorce papers to Brussels. The deal would have created Europe’s biggest exchanged, but regulators argue that it would have harmed competition in the EU by creating a de factor monopoly for clearing bonds and repurchase agreements. The decision doesn’t come unexpected and regulators already blocked a proposed tie-up with NYSE Euronext five years ago.

U.K. Mortgage Approvals Slow in February

U.K. mortgage approvals slowed down in February, with the total of 68.3K falling short of expectations and down from 69.1K in the previous month. Net mortgage lending stood at GBP 3.5 billion, lending to non-financial firms fell by GBP 1.8 billion and unsecured lending growth slowed to GBP 1.4 billion in February, below the GBP 1.6 billion average over the past 6 months.

German February import price inflation jumped to 7.4% year over year from 6.0% year over year in January. The number was higher than expect and not just driven by energy prices, with import price inflation excluding energy accelerating to 3.7% year over year from 2.5% year over year in the previous month. Food price inflation is also picking up, although this again is also largely due to base effects and with headline HICP expected to fall back again in March.