• Risk sentiment on a back-foot after hopes of an immediate fiscal deal have quite quickly diminished. • Overnight in Asia the region was butting up against resistance level but failed to break through. • STERLING weakened initially & FTSE exporters outperformed, as expectations of little developments in BREXIT talke but then turnaround was post BREXIT headlines. UK signals it won't walk away from EU trade talks immediately • In terms of factors; contrasting with what we saw in the US overnight Value is outperforming +50bps • COVESTRO CAP INCREASE: Overnight raised €447m, priced at €43.85, -0.9% -- proceeds to be used to partially re-finance the purchase of announced acquisition of resins biz from DSM • M&A spex in US Oils aft hrs ConocoPhilips in talks to acq. Concho Resources ($8b mkt cap). Note: Conoco has been dropping hints about a potential M&A deal for months