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European recovery continues, Standard Life hit by Lloyds decision

Equities continue to be in recovery mode as traders are still cautiously optimistic. 

The FTSE 100, DAX and CAC 40 all hit one week highs this morning. Investors are viewing the smaller swings on global stock markets as a sign that a lot of the fear dissipated, and are content to buy back into the market.

Standard Life Aberdeen shares are in the red after the company will take a hit of £40 million after Scottish Widows, who are owned by Lloyds, decided to end the contract between the two. It is estimated that Standard Life Aberdeen derives approximately 5% of their revenue from Scottish Widows. A major money manager like Standard Life Aberdeen should be able to attract new customers to make up the shortfall. The timing is unfortunate as asset managers have come under pressure due to the recent stock market volatility .The share price is down 4.9%.

Oxford BioMedica secured a supply gene therapy products to Bioverativ, and the deal is worth $100 million. The announcement similar to last year’s $100 million contract with Novartis where it supplied lentiviral vectors. The share price is up 9.5% and it hit a 22 month this this morning, and if the bullish move continues it could target 13p.

Continued weakness in the US dollar helped EUR/USD and GBP/USD today. The shock decline in US retail sales yesterday is still weighing on the US dollar. Spain revealed disappointing inflation figures but it has little impact on the single currency versus the US dollar. The Spanish CPI rate dropped to 0.6% from 1.1%, which is a worrying development as it suggests demand is weak.

At 1.30pm (UK time) the US will announce the jobless claims report, and the consensus is for 230,000, and that would be an increase from the previous reading of 221,000.

We are expecting the Dow Jones to open up 230 points at 25,123 and we are calling the S&P 500 up 20 points at 2718.

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