FTSE at an eight-week high
The FTSE 100 is at an eight-week high, on the back of merger and acquisition speculation in the pharmaceutical sector and a cooling of the situation in Ukraine. The EU may have imposed sanctions on a number of Vladimir Putin’s close comrades, but there have been reassurances from Moscow that the situation will not turn into another Crimea. Stability has returned to European equities, with traders no longer afraid that Russia will turn off the gas tap.
Serco has gone from bad to worse after its third and most damaging profit warning in the less than twelve months. When Rupert Soames takes over as CEO next month he will have his work cut out for him.
IG is making a political binary for the up and coming European Parliament elections, which currently suggests that UKIP has a 50:50 chance of winning the most seats.
Merck reveals solid EPS
In the US, the Dow Jones is up 69 points at 16,518. Pharmaceutical companies are also in demand across the pond, with Merck up 2.8% after revealing a better-than-expected EPS even though revenues came in marginally below estimates.
Gold struggling to touch $1300
Gold is creeping higher but it still hasn’t managed to touch the $1300 level. As long as equity markets remain buoyant, gold will struggle to break the $1300 mark.
German CPI figures weigh on EUR/USD
The euro was hit by the weaker-than-expected German inflation figures. When the strongest economy in the eurozone is reporting soft CPI figures the European Central Bank will be under more pressure to introduce a stimulus package.
The pound is holding its ground against the US dollar despite the UK GPD figures missing expectations. This has put sterling in a good position ahead of the Federal Open Market Committee statement tomorrow.