10 08 EU PRE OPEN

INDICES
Friday, European stocks were modestly higher. The Stoxx Europe 600 Index rose 0.29%, Germany's DAX 30 climbed 0.66%, and both France's CAC 40 and the U.K.'s FTSE 100 edged up 0.1%.

EUROPE ADVANCE/DECLINE
65% of STOXX 600 constituents traded higher Friday.
50% of the shares trade above their 20D MA vs 45% Thursday (below the 20D moving average).
49% of the shares trade above their 200D MA vs 47% Thursday (below the 20D moving average).

The Euro Stoxx 50 Volatility index eased 0.74pt to 24.2, a new 52w high.

SECTORS vs STOXX 600
3mths relative high: Financial Services, Construction, Industrial
3mths relative low: none

Europe Best 3 sectors
telecommunications, technology, media

Europe worst 3 sectors
basic resources, energy, banks


INTEREST RATE
The 10yr Bund yield fell 3bps to -0.53% (below its 20D MA). The 2yr-10yr yield spread fell 1bp to -17bps (above its 20D MA).


ECONOMIC DATA
FR 14:00: 12-Mth BTF auction, exp.: -0.56%
FR 14:00: 6-Mth BTF auction, exp.: -0.59%
FR 14:00: 3-Mth BTF auction, exp.: -0.57%


MORNING TRADING
In Asian trading hours, EUR/USD edged up to 1.1793 and GBP/USD bounced to 1.3072. USD/JPY retreated to 105.78. AUD/USD climbed to 0.7166. This morning, official data showed that China's CPI grew 2.7% on year in July (+2.6% expected), while PPI dropped 2.4% (-2.5% expected).

Spot gold fell further to $2,029 an ounce.


#UK - IRELAND#
Rolls-Royce's, an engineering group, credit rating was downgraded to "BB+", a junk rating, from "BBB-" at Fitch, outlook "Negative". The rating agency said: "The downgrade reflects expectations of a materially greater free cash outflow for 2020 of around GBP4.1 billion. We therefore forecast gross debt to rise in 2020-2023, resulting in leverage metrics remaining outside of their sensitivities until at least 2022. All these result in a financial profile that is no longer representative of an investment-grade rating which, combined with a weakening business profile driven by an under-performing and structurally smaller civil aerospace division, have led to our assessment of a 'BB+' rating."

Ocado Group, an online grocery retailer, was downgraded to "underweight" from "equalweight" at Barclays.


#FRANCE#
Suez, a water and waste company, is in early talks to sell its 3.5 billion dollars waste management business to German retailer Schwarz Group, reported Bloomberg citing people familiar with the matter.


#ITALY#
Atlantia, an infrastructure group, said it has started exclusive talks with private equity firm Partners Group for the sale of a 49% stake in Telepass.

From a daily point of view, the share formed a bullish abandonned baby between the 10th and 15th July on strong volume, developing a short-queeze psychology. Above 11.2E look for the horizontal resistance at 17.8E and 19.4E in extension.

Source: GAIN Capital, TradingView

Tenaris, a steel pipes manufacturer, was downgraded to "underweight" from "equalweight" at Barclays.


#SWITZERLAND#
Roche, a multinational healthcare company, said a phase 3 trial of etrolizumab failed to meet its primary endpoint versus placebo as maintenance therapy in people with ulcerative colitis. Meanwhile, the company reported that the U.S. Food and Drug Administration has approved Evrysdi for the treatment of spinal muscular atrophy in adults and children 2 months of age and older.


#NORWAY#
Equinor, a Norwegian energy company, announced the appointment of Anders Opedal, currently Executive Vice President Technology, Projects and Drilling, as new president and CEO from November 2.