The FTSE 100 is a little lower, but the rest of Europe is firmly in the red. 

Europe

The Federal Reserve announcement at 6pm (UK time) and the press conference at 6.30pm (UK time) will be in focus. Some dealers are taking their money off the table ahead of the announcement. The language used by the US central bank in recent months has been neutral, and some traders are expecting that to be the case later. US-China trade talks are set to continue next week, and there has been some concerns about the state of trade relations, and that has been a factor in today’s decline. 

Kingfisher confirmed that Veronique Lauary, will be stepping down as CEO, but a departure date hasn’t been announced and the process to find a replacement has begun. Ms Lauary, launched an initiative to transform the company in 2015, but that process dragged on, and now the firm essentially gave up trying to reach their £500 million saving target. It’s the same old story at Kingfisher, where B&Q and Screwfix continue to perform well while the French, Russian and Romanian operations underperformed. Full-year underlying pre-tax profit came in at £697 million, while analysts were expecting £686 million.

Bayer shares have sold-off sharply this morning after a US jury found that the company’s weed killer, ‘Roundup’, caused cancer. This in the second time in one year a jury has come to that conclusion. This could open the floodgates to further cases, and the group might have to set aside vast sums of money for potential cases. The stock has been pushing lower since the start of the month, and a break below the December low of €58.35, might pave the way for further losses.

Kier Group swung to a loss in the first-half of the year. The firm registered a loss of £35.5 million in the six month period, and that compares with a profit before tax of £34.3 million in same period last year. The dividend was slashed by 78% to 4.9p, and the net debt position was lowered by 24.3% to £180.5 million. The company raised funds through a rights issue in December, and now it needs to focus on turning itself around.

BMW shares are in the red after the company issued a profit warning. The group said that profit would be ‘well below’ last year’s level. The automaker cited adverse foreign exchange movements and higher technology costs for the poor update. The automaker also announced a €12 billion cost saving scheme.

US

The Dow Jones and S&P 500 are a little lower ahead of the interest rate decision. The Federal Reserve are tipped to keep rates on hold this evening, and some traders feel the US central bank will issue a neutral statement too. The Fed learned their lesson last October and November when their hawkish comments sparked selling in global markets. Since then, the US central bank has rowed back on its hawkish comments and given the fragile eurozone economy, the slowdown in China, and the uncertainty surrounding Brexit, I would be surprised if the Fed adopt a hawkish tone. That being said, the US economy is in good shape, so some optimism is expected, just not too much.

Fedex shares are in the red after the company released disappointing third-quarter results last night. Earnings per share were $3.03, while the consensus estimate was $3.11. Revenue for the period was $17.01 billion, and that undershot the $17.67 billion forecast. The group lowered its outlook too. The group now expects full-year EPS to be between $15.10 and $15.90, while the previous forecast was $15.97. The delivery cited ‘weak global trade growth’ for the underwhelming update. 

FX

GBP/USD is still in the red today, even though it rallied after Prime Minister May announced she has asked for an extension to Article 50 until late June. Traders reacted well to the news, and there was some short covering and bargain hunting. The next move will be from the EU, and the EU Council meeting will begin tomorrow and last until Friday. The Brexit news overshadowed the latest UK inflation figures. Headline CPI ticked up to 1.9% from 1.8%, while the core reading dipped to 1.8% from 1.9%. The rise in energy prices was blamed for the divergence. 

EUR/USD hasn’t moved much today as there was no major economic announcements from the eurozone or the US. The single currency has been in a downtrend since January, and if the bearish move continues, it might target the 1.11176 region. 

Commodities

Gold is in the red this afternoon but volatility has been low. The metal continues to dance around the $1,300 mark. Even though gold suffered a sell-off in February, the metal remains in its wider upward trend, and should the bullish move continue, it might target the $1,320 area.

Oil has been driven higher by the large decline in US oil and gasoline inventories. The Energy Information Administration report revealed that oil stockpiles dropped by 9.58 million barrels, while the consensus estimate was for a build of 309,000 barrels. Gas inventories dropped by 4.58 million barrels, and traders were expecting a 2.41 million barre fall.

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