Europe midday: Stocks bounce as analysts eye 'green shoots' in economic data

That was despite reports that US and Chinese negotiators might not be seeing eye-to-eye yet when it came to the enforcement mechanisms that should be put in place for any trade deal and Beijing's currency policy.

Some analysts nevertheless were quite cautious, with Michael Hewson at CMC Markets UK telling clients: "The steady recovery in global equity markets that we’ve seen since the start of the year appears to have hit a fairly big bump in the road [...] whatever the outcome of a US, China trade deal, it won't be enough to mitigate a broader economic slowdown."

Those at Morgan Stanley on the other hand were more upbeat, saying: "After a tough 12 months, we think European macro news-flow looks set to improve as idiosyncratic factors fade and China starts to recover. This should be positive for European equities and [the euro]. We remain 'underweight' European government bonds and add China exposure in [euro-denominated investment grade] via Autos and Industrials."

As of 1200 GMT, the benchmark Stoxx 600 was 0.39% higher at 372.0, alongside a 0.40% rise on the Dax to 11,503.27, while the FTSE Mibtel was up by 0.30% to 20,545.62.

In parallel, front month Brent crude oil futures were adding 0.82% to $66.28 a barrel on the ICE on the back of reports that Saudi was set to keep its output will below 10.0m barrels a day.

Oxford Economics sees 'green shoots' in German IP data

A reading on German industrial production was the main release on Monday.

According to the Federal Office of Statistics, industrial output dropped at a 0.8% month-on-month pace in January, falling well short of forecasts calling for a rise of 0.4%, and by 1.2% excluding construction and energy.

But upwards revisions to the prior month's data made up for that shortfall entirely.

Furthermore, excluding autos, production grew by a "solid" 0.5% on the month "as large sectors such as chemicals and metal goods saw sustained rises as they begin to partially make up for the weakness at the end of last year," Oliver Rakau at Oxford Economics pointed out.

Similarly, separate data showed the country's seasonally-adjusted trade surplus shrank from €19.9bn for December to €18.5bn in January, but the year-on-year rate of growth in exports picked up from 1.4% for December to 1.8% in January, he noted.

"A closer look reveals that even German industry is seeing some green shoots emerging. We stick to our Q1 GDP forecast of 0.5% q/q," he said.

Over in France meantime, the central bank's latest survey of activity pointed to an acceleration in February within manufacturing, although Banque de France trimmed its forecast for first quarter GDP growth by a tenth of a percentage point to a 0.3% quarter-on-quarter clip.

To take note of, investors were also waiting on a key report on US retail sales covering the month of January.

And in China ...

Regarding the US-China trade talks, on Saturday, Chinese vice commerce minister, Wang Shouwen, said an enforcement mechanism for any trade deal must be "two way, fair and equal".

Also at the weekend, Chinese central bank Governor, Yi Gang, said the need to abide by previous commitments not to engage in competitive devaluations had been discussed by both side, but he made no reference to any unilateral pledge by Beijing not to do so.