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Stocks firmer after positive comments from China

European markets are enjoying a positive start today after China’s leader Xi Jinping said he wants to continue to open up the Chinese economy. 

The statement at the Bo’ao forum points to a more capitalist, more globalist China, and the timing is good as it eases tensions about a possible trade war.

The mining sector has bounced back after yesterday’s large drop. The comments from Beijing sparked interest in the natural resources sector, with China a major importer of commodities, and stocks like Antofagasta, BHP Billiton and Rio Tinto are some of the biggest gainers on the FTSE 100.

Evraz has recouped some of yesterday’s losses after the dust settled in relation to US-imposed sanctions on Russia. Washington DC took to the decision to punish Russia for interfering in the US presidential election in 2016. The sanctions may get worse with the US at odds with Russia over Syria, so the rally in Evraz this morning may be short-lived.

Glencore is enjoying the mining sector bounce, while it also clarified its position regarding Rusal – the Russian aluminium producer. Glencore’s CEO Ivan Glasenberg has resigned as a director of Rusal, and the London-listed mining miner confirmed it has a number of contracts with the Russian firm. Glencore assured investors they are ‘committed to complying with all applicable sanctions’ that impact Russian companies.

EUR/USD is a touch weaker this morning on the back of a firmer US dollar. The greenback took a knock yesterday on account of the heightened political tensions between the US, China and Russia. In February, French industrial production grew by 1.2%, while economists were expecting a reading of 1.4%, and the January reading was revised to -1.8% from -2%. The underwhelming figures highlight France’s fragile economic state.

According to the British Retail Consortium-KPMG retail sales monitor, UK retail sales rose by 1.4% in March on a like-for-like basis, comfortably topping the 0.3% estimate. The figures dismiss the idea the ‘Beast from the East’ would impact consumers’ appetite, and GBP/USD is higher on the back of it.

At 1.30pm (UK time) the latest US PPI data is unveiled, and the consensus is for a reading of 2.6%, which would be an improvement on the previous reading of 2.5%.

We are expecting the Dow Jones to open up 316 points at 24,295 and we are calling the S&P 500 up 32 points at 2645.

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