European stock markets are higher this afternoon as traders are optimistic about the state of US-China trade relations. 

Europe

According to reports, negotiations between the two sides were constructive and that has boosted sentiment. Last Friday, European stock markets suffered a severe decline on the back the dismal German manufacturing figures, and a large portion of the lost ground has been recouped. During the week, Mario Draghi, the head of the ECB said interest rates could be held steady in order to facilitate the region’s economy, and dealers are likely to view negative economic news as positive news for the equity markets.

TUI shares sold-off sharply today after the company warned that the grounding of the Boeing 737 Max could impact the firm to up €300 million. 10% of the aircrafts owned by TUI are Boeing 737 Max planes, and they are due to receive delivery of an additional eight Boeing 737 Max aircrafts in May. Only last month the travel operator issued a profit warning, saying that margins were squeezed due to last summer’s warm weather and the weakness in the pound. There have been some evidence that consumers are curtailing their spending on account of Brerxit and that is hurting the travel sector too. TUI shares have been in decline since February, and if the negative move continues it might target the 600p area.

H&M shares soared today after the fashion house moved away from marking down prices. First-quarter net sales jumped by 10% - meeting analysts’ forecasts. Pre-tax profit for the period fell by 17%, and the company cited platform costs, expenses in relation to new logistics systems, and declines in German sales for the fall in earnings. Karl-Johan Persson, the CEO of H&M, said the ‘transformation work is having an effect’ and will continue with the programme. 

US

The major indices have pushed higher today as progress has been made in relation to US-China trade talks. The trade dispute has been prolonged, but in recent months, the bulk of the updates we have heard have been positive, and that has contributed to the rally in 2019.

There were mixed economic reports from the US today. Core PCE, the Fed’s preferred inflation measure, cooled to 1.8%, and undershot the 1.9% forecast. Personal consumption and personal income came in at 0.1% and 0.2% respectively, and traders were anticipating 0.3% for both reports. The University of Michigan consumer sentiment report edged up to 98.4, from 93.8 and that is encouraging to see, but cold hard sales figures are more important that sentiment survey’s .The Chicago PMI fell to 58.7, from 64.7. The economic updates today are likely to encourage the Fed to keep their monetary policy on hold.  

Lyft shares began trading today. The IPO price was $72, and the stock began trading at $87.24 cents. The market capitalisation is in the region of $22 billion, which is huge considering last year’s revenue was $2.16 billion, and it registered a loss of over $1 billion.

FX

GBP/USD sold-off after the House of Commons voted against the withdrawal agreement by 58 votes. As it stands, the UK set to leave the EU without a deal on 12 April, unless something is agreed upon between now and then, and that has rattled sterling.

EUR/USD is largely unchanged even though French CPI cooled to 1.3% from 1.6% in February. In the final quarter of 2018, the Spanish economy grew by 2.3%, which undershot the 2.4% forecast. The euro-area has been producing largely soft economic indicators lately and that might encourage the European Central Bank to maintain their loose policy.

Commodities

Gold has bounced back after the sharp sell-off yesterday. The metal’s low volatility today is on the back of the small trading range in the US dollar. Gold has been in a solid upward trend since mid-November, and if it holds above the $1,276 region, the bullish move should continue. 

Oil is higher today as the macroeconomic mood is upbeat on the back of reports that the US-China trade talks were constructive. The trade dispute between the two sides been hanging over markets for months, and the indication that things are heading in the right direction has boosted the energy market.

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