European equity markets are higher today on the back of the dovish update from the European Central Bank (ECB) yesterday. 

Europe

Mario Draghi, the ECB chief, claimed that ‘significant stimulus’ is required to sustain inflation. Dealers are happy to buy into the market on the back of the yesterday’s ECB update. The DAX, CAC and IBEX have reached levels not seen since early December, so the sentient is clearly bullish. 

Fuller Smith & Turner is calling it time on the brewing business as the group will sell the division to Asahi for £250 million. The move by the London-listed company will allow it to devote all its attention to the pub and hotel business – which makes up 87% of operating profit. The Brewing company is expected to return between £55 million and £69 million. The group confirmed that like-for-like sales increased by 5.6% in the 10 weeks until mid-January. 

AG Barr said it expects full-year revenue to increase by 5%, but the company cautioned about slowing demand due to tighter regulation in the sugary drinks market. The firm confirmed it will undergo a share repurchase programme. The drinks company expressed concerns about the political uncertainty surrounding Brexit. The stock turned lower in the past few sessions, but if it holds above the 745p region, the wider uptrend should continue.

Vodafone shares are in the red after the company revealed soft numbers. Third-quarter revenue fell by 6.8%. European and worldwide revenue fell by 5.6% and 11% respectively. Yesterday, we heard from Vodacom, the groups’ South African division, which posted a 0.9% decline in domestic revenue. Even though the firm registered a dip in revenue, the group maintained its full-year earnings guidance of approximately 3%.The stock fell to its lowest level since July 2010, and if the bearish trend continues it might target the 125p region.

US

Equities are higher this afternoon as a lack of negative news in relation to China-US trade relations has encouraged traders to buy into the market. Steven Mnuchin, US Treasury Secretary, seems hopeful about the trade situation, but no real details have emerged.

Intel shares are lower this afternoon on the back of the disappointing fourth-quarter update last night. Revenue for the period was $18.66 billion, while analysts were anticipating $19.01 billion. The guidance undershot forecasts also. The company predicts that first-quarter EPS will be 87 cents, while the consensus estimate is $1.01.

Colgate-Palmolive shares are in demand today after the company confirmed that net sales topped forecasts. The group reported net sales of $3.81 billion for the fourth-quarter, while analysts were expecting $3.77 billion. The group predicts full-year net sales for 2019 to be between zero and mid-single digit growth, which is slightly more optimistic than equity analysts’ estimates.    

FX

GBP/USD is higher on the report the DUP are happy to back Theresa May’ Plan B proposal if it includes a timeframe for the Irish backstop. Traders are viewing this as a sign an agreement might be reached, but Brussels will need to be convinced too, and that is likely to be difficult.

EUR/USD has bounced back after yesterday’s sell-off. The weakness in the greenback across the board has helped the single currency today. Traders have shrugged off the poor German Ifo report – which fell to its lowest rate since 2010.

Commodities

Gold has rallied on the softer US dollar .The metal continues to have an inverse relationship with the greenback ,and given the commodity was subdued for most of this week, today’s move might be the start of another attempt on the $1,300 mark.

Oil prices are firmer as dealers are fearful the US will impose sanctions on Venezuela. The fear of tighter supply from the Latin American country has outweighed the building US oil and gasoline stockpiles. 

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