Europe midday: All eyes on Draghi
Stocks are holding slightly lower as investors wait on a speech from European Central Bank president Mario Draghi at noon and mull the first drop in Chinese factory gate inflation since June 2016 amid a somewhat uneasy calm in financial markets despite record-low levels of volatility.
Against that backdrop, news that the US president fired the director of the Federal Bureau of Investigation highlighted ongoing headline (when not full-blown political) risk in the US.
As of 1143 BST the Stoxx 600 was drifting lower by 0.08% to 395.02, as the Dax slipped 0.05% to 12,743.28 and the FTSE Mibtel gave back 0.17% to 21,450.95.
Despute the historically depressed levels of 'implied volatility' in stock markets, some analysts believed their was not yet reason for undue concern.
"An interesting similarity between the 1993 and 2006 periods is that USD (DXY) fell in both periods to a similar extent. Admittedly, just two periods in the last 17 years isn't enough to draw any statistical significance, but looking at these two periods, it seems to suggest that VIX hitting 10 isn't necessarily an immediate signal of market turmoil," said analysts at Morgan Stanley.
ECB chief Draghi was due to speak to the Dutch parliament towards 1100 BST with many investors keen to see if he would hint at a slight change in the monetary authority's policy stance.
His remarks would also come amid intensifying calls for a debate around the need for reforms of the euro area's architecture, especially following the election of French centrist reformer Emmanuele Macron as president.
"Mario Draghi will give a speech before the Dutch parliament. After the French presidential election, Draghi might use today’s opportunity to cautiously prepare market participants for [a change in wording in the Governing Council's balance-of-risks assessment], which is likely to be formalized at the GC meeting in June. In our view, this would cause some pressure to build in the EGB market," said analysts at UniCredit Research.
Meanwhile, on the other side of the globe, data released overnight showed Chinese factory gate prices slipped from a 7.6% year-on-year pace in March to 6.4% in April.
That, Julian Evans-Pritchard at Capital Economics said, meant hopes for "sustained reflation" in the world's third largest economy are fading.
Against that backdrop, euro/dollar was off by 0.05% to 1.0869 while front month Brent crude futures were up by 0.96% to $49.20 a barrel on the ICE.
French factories whirred back into life in March, with total output ahead by 2.5% on the month, while total industrial production was ahead by 2.0% (consensus: 1.0%).
Industrial production in Italy outpaced economists' forecasts, rising by 2.8% year-on-year in March (consensus: 2.5%).
First quarter operating profits at HeidelbergCement slipped 3% on a like-for-like basis, dragged down by a decline in emerging markets.
Sales volumes over that same period at France's EdF fell 1.5% hurt by the weaker pound, the energy giant disclosed.
Net income at French lender Natixis jumped 40% during the first quarter amid a flood of trading activity.