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Next is in fashion again

Stocks in Europe are a mixed bag this morning as traders look ahead to the Federal Reserve minutes later this evening. 

The FTSE 100 is broadly unchanged on the day while the DAX and CAC 40 are being assisted by the dip in the euro.  

Next shares are up 7.4% after the fashion house posted a 1.5% jump in Christmas sales, while dealers were expecting a decline of 0.3%. The stronger than expected sales over the festive period prompted the company to raise its full-year profit guidance by £8 million to £725 million.

At 7pm (UK time) the Federal Reserve will post the minutes from last month’s meeting where interest rates were hiked by 0.25%. The rate increase in December was accompanied with a statement which kept their outlook unchanged, and tonight’s update will give traders a better insight as to what the US central bank is thinking.

The US dollar has managed to stem the decline it has been in for a weeks, but today’s positive move is still very small when compared with the ground lost recently.

GBP/USD is largely unchanged on the day and the pound hit a fresh three and an half month high versus the US dollar this morning. Sterling has been in steady upward trend versus the greenback since March, and it appears the rally may continue. The UK construction PMI report for December fell to 52.2, down from 53.1 in November and traders were expecting a reading of 52.5.

EUR/USD is softer this morning on account of the bounce back in the green. The single currency has been pushing higher versus the US dollar since early November. Germany posted a drop in their unemployment rate to 5.5%, while economists were expecting a reading of 5.6%. The strongest economy in the eurozone keeps moving from strength to strength, while will bode well for the euro.

We are expecting the Dow Jones to open up 21 points at 24,845, and we are calling the S&P 500 up 2 points at 2697.

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