Breaking news from the eastern frontier of Continental Europe has really injected some urgency this morning, and all of the major European indices are higher by 1% or more. The FTSE 100, which has consistently been the least reactive to the Ukraine story, lags with a gain of 1%, with the DAX moving higher by 1.5%, and similar gains are seen in the periphery.
Conversations this morning between Russia’s Vladimir Putin and Ukraine’s Petro Poroshenko have increased the likelihood of a permanent ceasefire in the embattled east of the former Soviet nation. Equity markets are showing that, while they may have been downplaying the story's relevance as much as possible in recent weeks, when good news breaks there is a rush to put risk on. This news has helped overshadow another set of disappointing European services PMI numbers, and taken some focus off a much anticipated European Central Bank meeting, while the Nato summit in Wales gains a little more market significance.
UK services PMI just crossed us, and a very tidy 60.5 reading kept the pressure up on the Bank of England over interest rates. It is a similar one-way traffic story for UK shares, with only half a dozen names in the red. Hargreaves Lansdown (-2.3%) and Admiral (-1.4%) are the fallers of note.
The fund supermarket has highlighted a boost in activity from the Royal Mail share sale, and a successful navigation of changes to the way the fund management industry earns its keep. However, slightly missing market expectations has caused the shares to head lower and continue a trend which has left them down so far in 2014.
US markets start the countdown to ‘Jobs Friday’ today without the normal Wednesday data dump, as the bank holiday pushes the ADP figures to tomorrow. We will get the latest read of the Federal Reserve’s view of the US economy as the Beige Book release comes this evening. US markets are expected to open higher as per Europe, but traders are keenly listening to updates from the Ukraine as to whether this is the beginning of the end or not. The Dow Jones opening call is currently up 50 points at 17,110.