The DAX Hits Fresh high as Catalonia Crisis Fades

Bund and Gilt yields nudged higher while Eurozone peripherals continue to outperform and Spanish, Italian and Portuguese 10-year yields declined. Spreads over the German benchmark continue to narrow as the ECB will continue to buy assets until at least September next year and political risks ease. The German DAX is leading European stocks higher on Wednesday returning from Tuesday’s holiday with a surge of more than 1.5% to new record highs of over 13400. The FTSE 100 underperformed with a modest gain of 0.20%, as a stronger than expected manufacturing PMI reading underpinned further gains in Sterling and likely solidified expectations for a rate hike from the BoE Thursday. Optimism about earnings reports and U.S. tax plans continue to underpin investor sentiment and U.S. stock futures are also up, while WTI is trading near 55.00 per barrel, after reaching a session high of USD 55.22 per barrel.

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