Europe midday: Stocks little changed as euro strength ebbs
Stocks are holding lower, albeit only slightly so, as the upwards pressure on the single currency ebbs a little, although the US dollar is still trading on its back foot following the previous day's large drop in US government bond yields.
As of 1216 GMT, the benchmark Stoxx 600 was off by 0.04% or 0.07 points at 390.47, alongside a dip of 0.05% to 5,366.42 for the Cac-40 and a drop of 0.26% for the FTSE Mibtel to 22,143.05.
Meanwhile, the US dollar spot index was 0.30% lower to 92.724 while euro/dollar was tacking on 0.37% to trade at 1.1938.
On Wednesday, the yield on the benchmark 10-year US Treasury note declined by seven basis points to 2.41%, pushing the spread with the yield on two-year government debt to the near-decade low hit in early December.
That was not lost on Craig Erlam, senior market analyst at Oanda, who said: "The US dollar is trading lower for a second day on Thursday, still struggling after yields on Treasuries slipped on Wednesday. The flattening of the yield curve has triggered concerns that investors are possibly pricing in a slowing of the economy or even a recession and while this has historically happened on such expectations, I'm not convinced this is the case this time.
"Given the current environment, it's possible that this is more a reflection of longer term interest rates and the low inflation environment than the economic prospects. Still, if yields on long term US debt don’t rise or even fall as the Fed raises interest rates, it could fuel fears of an impending recession."
In the background, deadly attacks overnight in Russia and Afghanistan were reminding investors of the current difficult geopolitical backdrop.
On Wednesday evening, the explosion of a home-made bomb sowed chaos in a St.Petersburg supermarket, wounding at least 10 shoppers.
Further afield, a suicide attack on an office of Afghan Voice, in Kabul, claimed at least 40 victims.
Still on the economic calendar for later in the day were data on US foreign trade and factory sector conditions in the Mid-West, at 1330 GMT and 1500 GMT, respectively.
On the corporate front, Lufthansa was in the spotlight after Germany's anti-trust officials queried for further information on ticket prices after receiving complaints of price hikes in the wake of rival Air Berlin's demise.
Elsewhere, four of Italian lender Intesa San Paolo's top executives will step down in coming days, local daily Il Messaggero reported.
In other news, Standard&Poor's revised its outlook on the long-term corporate debt of Fressenius Medical Care from 'stable' to 'positive'.