Select the account you'd like to open


Stocks higher and US dollar firmer

market relief

market relief

European stocks are set to end the week on a positive note with traders willing to take on more risk. 


The fear that the US and China would engage in a trade war weighed on stocks during the week, but that uncertainty has lifted for now. As it is potentially going to be a US-instigated trade war, European dealers are taking their cues from US indices.

JD Wetherspoons shares are in the red after the company’s warning that costs are likely to rise took the shine off the good results. Revenue rose by 3.6% and profit jumped by 20%. The dividend was left unchanged. Wetherspoons predict that costs will tick up in the second-half as higher business rates and the sugar tax will be an issue. The results were respectable, but the forecast took the wind out of its sails. The stock has been in a strong upward trend for nearly two years, and today’s move lower may attract fresh buyers.

Traders received an insight into the psyche of Berkeley Group today after the company hit out at planning permission policies and buy-to-let lending practices. The homebuilder maintained their positive forecasts and stated that its position is ‘resilient’, but the commentary about the backdrop indicates some nerves. The company is focused on London and south-east England, and house prices are a touch softer now, which is also weighing on the stock.

Shares in GKN are a touch lower after Airbus said it would be ‘ practically impossible’ to initiate new contracts with the company should the takeover by Melrose go ahead. Airbus is major client of GKN and this has hit investor sentiment. To make matters worse for the Melrose bid, a number of MPs have raised concern about the takeover offer, as GKN has UK defence contracts, and the move may not be in the national interest.


Optimism has returned to Wall Street and the Dow Jones, S&P 500 and NASDAQ 100 are all higher on the day. The bullish sentiment is relatively small but it reflects the fading fears about a potential trade war with China. 

The US continues to reveal mixed economic indicators as the housing data showed a slowdown in activity, but consumer sentiment and industrial production spiked. In February, building permits and housing starts declined by 5.7% and 7% respectively. In contrast, the March preliminary University of Michigan consumer sentiment indicator jumped from 99.9 to 102 – its highest in 14 years. Industrial production hit a seven-year high. The takeaway message has been hawkish.


EUR/USD had a muted reaction to the dip in eurozone inflation, but the broadly positive US data put pressure on the single currency. In the euro area, the inflation rate fell to 1.1% from 1.3%, while the consensus was for 1.2%. The cost of living in the currency bloc is moving further away from the European Central Bank’s target, and monetary policy is now likely to be left unchanged

GBP/USD has been dented by the rally in the US dollar. The pound has been climbing versus the US dollar this month, so a pullback is not surprising. This week has been an uninteresting one for sterling, but the wider upward trend that has been in place for the past year is still intact.

USD/CAD hit a nine-month high as a slide in Canadian manufacturing sales and impressive industrial production and consumer sentiment data from the US propelled the currency pair higher. Manufacturing sales in Canada declined by 1%, while traders were anticipating a drop of 0.8%, and the December report showed a contraction of 0.3%. 


Gold has fallen to its lowest level in over two weeks as the stronger US dollar hurt the metal. Stellar consumer sentiment figures and robust industrial production figures have made traders fearful of interest-rate hikes from the Federal Reserve this year. Dealers are still divided on how many rate hikes we could see; some forecast three, while others are pencilling in four.

oil-west-texas-cash">WTI and Brent Crude were jolted higher after the International Energy Agency predicted that demand for oil will jump by 1.5 million barrels. The same report also stated that oil supply from non-OPEC members could increase by 1.8 million barrels.

The Baker Hughes active rig count will be released at 5pm (UK time) and the consensus is for a slight decline to 795 active rigs from last week’s reading of 796.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

Sign up for market update emails