A sparkle returned to European trading on Tuesday, with major indices buoyed by strong trade data from China and oil prices trading at fresh 2016 highs. The apparent turnaround in China’s economy, the rise in oil prices and a more cautious Federal Reserve have removed the major concerns that led to the beginning of the year sell-off.
The pickup in exports was likely supported by the devaluation of the yuan at the start of the year, which made Chinese goods relatively cheaper than domestic options abroad. During March the Chinese currency was at the strongest its been versus the dollar all year, which could mean the export rebound doesn’t last long, although the yuan has fallen in value versus a basket of trade-weighted currencies.
Most sectors of the FTSE 100 were in the green, led by the 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 stocks look set for a solid start as oil prices hold their gains ahead of results from global banking giant JP Morgan before the opening bell.
USA pre-opening levels
S&P 500: 12 points higher at 2,073
Dow Jones: 91 points higher at 17,812
Nasdaq 100: 33 points higher at 4,529
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