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Regardless of the selloff in US equities last night European markets have opened in a positive mood, boosted by better-than-expected pre-market German monthly retail sales figures. The mid-morning eurozone inflation figures remain a sizeable hurdle yet to be cleared, however.
The oil price continues to dominate traders’ thinking as US light has already traded below $50 a barrel, and this morning’s Brent crude price action has now followed suit. Last month’s statement from Saudi oil minister Ali Al-Naimi that they would not necessarily change output even if oil traded down at $40, looks like it could be tested sooner rather than later.
This morning will also see a flying visit to 10 Downing Street from German chancellor Angela Merkel, in what is likely to be the last before the general election in the summer.
Depending on your viewpoint, this morning’s Sainsbury’s figures either beat market expectations or are ‘less worse’ than expected. The food retailer’s figures have encouraged the FTSE climbers list to be dominated by fellow members of the sector as Tesco, Marks & Spencer and Morrisons have enjoyed a sentiment boost.
Long after European traders have finished today, US markets will have the opportunity to directly gauge the Federal Reserve’s confidence with the release of the latest minutes. The race to increase interest rates is now a one-horse race, and these minutes should shed a little light on whether the US intends to gallop or trot to that decision.
Ahead of the open we expect the Dow Jones to start 55 points higher at 17,426.