Revised expectations over the pace of rate rises in the US and a slump in the price of oil back below $40 per barrel has frightened most leading European equity benchmarks into losses in excess of 1%.

The Fed has seemingly backtracked from the very cautious message put out via its forecasts and the press conference from Fed Chair Janet Yellen. Fed speakers reviving the chance of a rate hike in April have forced traders to quickly cover short-dollar positions.

There were only a handful of risers on the FTSE 100 in a broad-based sell-off led lower by catalogue retailer Next and commodity shares. Other retailers joined the drop-off with Marks and Spencer and Primark-owner Associated British Foods near the bottom of the UK benchmark.

Next shareholders lost their shirt when the company’s stock dropped double digits after its Chief Executive Lord Simon Wolfson offered a stark warning for the year ahead. Lord Wolfson suggested it could be the toughest year since 2008 for Next as consumer spending looks less stable. He even went so far as to say there could be a “cyclical move away from spending on clothing.” According to Lord Wolfson, it looks less likely that UK consumers keep spending, and if they do, it may not be on clothes, which are Next’s bread and butter.

Strength in the dollar is casting a long shadow across markets. Commodities denominated in the greenback are falling, taking oil and basic resource sectors of the stock market down with them. The Russian oil minister has said it is “technically possible” Russia could cut oil output by 5%. That Russia “could” cut output may be stating the obvious but Siberia’s harsh climate does limit how quickly it can be done.

The British pound fell to its lowest versus the euro since December 2014, while the cost of hedging a decline via currency options increased dramatically as Brexit fears jumped. Polls conducted by ICM and ComRes showed a narrowing lead for the “Remain” campaign. UK retail sales fell less than expected in February, taking a bit of sting out of the Sterling decline.

US stocks look set for a weaker start as investors pull positions before the long Easter weekend amidst renewed uncertainty over US monetary policy and a weaker oil price.

USA pre-opening levels

S&P 500: 8 points lower at 2,028

Dow Jones: 48 points lower at 17,454

Nasdaq 100: 20 points lower at 4,382



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