UK and Europe
Global stock markets were in better spirits on Wednesday after Chinese trade data and US corporate earnings surprised on the top side as oil prices made new 2016 highs.
Italy’s Economy Minister saying the new rescue fund won’t be blocked by the EU, bigger than expected profits at JP Morgan, and the oil price helping to subside fears over non-performing loans to the energy sector has improved the outlook for banks. Asian-focused Standard Chartered (LON:STAN) gained over 9% on signs of a turnaround in China’s economy while recently beaten-down Deutsche bank (LON:0H7D) shares gained over 8%.
The apparent turnaround in China’s economy, the rise in oil prices as well as a more cautious Federal Reserve have removed the major concerns that led to the beginning of the year sell-off.
Most sectors of the FTSE 100 were in the green, led by the China and commodity-sensitive mining sector with only the more defensive utilities falling behind. Tesco (LON:TSCO) was a notable laggard after cautionary guidance from CEO Dave Lewis as the supermarket saw a return to full-year profitability.
US
US stocks reached new highs for 2016 with the Dow Jones reaching its highest since December 7 as global sentiment improved and JP Morgan reported higher than expected profits.
FX
The US dollar was mostly stronger on Wednesday despite a surprise fall in US retail sales and producer inflation during March after multiple Fed speakers yesterday raised the prospect of a third rate hike this year.
The Canadian dollar was unchanged against the greenback after the Bank of Canada left interest rates on hold.
Commodities
The price of crude oil rose on Wednesday as optimism of a price freeze at this weekend’s producer meeting trumped a surprise build of 6.6m barrels in US inventories. Gold retreated from recent highs as risk-on sentiment saw funds move into equities whilst the better China data renewed demand for industrial metals including copper.
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