There is a broad based sell-off in Europe this morning. 

All the major sectors, including  retail, financial and natural resources are under pressure. The macro outlook hasn’t really changed, but it seems that investors are questioning the rally that begun nearly three weeks ago.

WPP announced that like-for-like reported billing declined by 5.4%, while the CEO, Martin Sorrell, stated last year ‘wasn’t pretty’. The world’s biggest advertising company revealed poor figures in August, as companies are spending less on traditional advertising. Facebook and Google have been eating into WPP’s market share as companies use different routes to target their clients. The share price is down 12.5%, and has slipped to a level not seen since October 2014.

Shares in Carpetright have plunged after the company issued a profit warning – it’s second in two months. The company stated that trading conditions have ‘remained difficult’ and that it expects now to make a loss this year. Talks are being held with lenders, and the struggling retailer is hoping to ‘turnaround the businesses’. Two profit warnings in quick succession has ravaged investor confidence, and sentiment is likely to remain bearish.

EUR/USD is a touch weaker today as underwhelming data from the eurozone put pressure on the euro. Manufacturing reports from Italy, France and Germany all showed a slowdown in the growth rate. It is possible the relative strength of the euro is holding back the economies of the currency bloc.

GBP/USD is also weaker today on account of the continued uncertainty surrounding the Brexit talks. Issues such as the Irish border need to be solved before traders become confident in the pound again. UK manufacturing was broadly unchanged as the PMI report came in at 55.2, down from 55.3 in January.

At 3pm (UK time) Jerome Powell, the chair of the Federal Reserve, will testify before the Senate Banking Committee. Mr Powell gave an update during the week, which was a touch on the hawkish side. Traders will be paying close attentional to the speech to ascertain clues in relation future monetary policy. 

We are expecting the Dow Jones to open down 89 points at 24,940 and we are calling the S&P 500 down 7 points at 2706.

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