The DAX hit a three-month high as the market made up for lost time due to the public holiday yesterday. 

Europe

The mood in Europe is positive, as President Trump won’t be imposing tariffs on EU steel and aluminium, at least for now – the US president is due to make a decision on levies next month.

Standard Chartered announced solid first-quarter figures, but profit-taking put pressure on the stock. The bank had a strong start to the year as profit increased by 20% to $1.26 billion, and that compared with analyst forecasts of $1.21 billion. Increased demand for loans, and a decline in loan impairments on a quarterly basis helped the rise in earnings. Standard Chartered is very close to achieving its cost-cutting target. The share price has rallied over 10% from the lows of last month, and it would appear that investors had high expectations for the numbers today. Some profit-taking isn’t a surprise, and if the positive trend continues it could target 800p.

Ryanair shares are in demand after the company reported a 9% jump in passenger numbers on a yearly basis, and the load factor held steady at 96%. The airline is continuing its ‘always getting better’ policy and given the solid passenger figures, the strategy is working.

US

US equity markets are mixed as traders await the Federal Reserve announcement at 7pm (UK time). Dealers are not expecting any change in interest rates, but the statement might lay the groundwork for a rate hike next month. US central bankers have been clear that they are following the economic data, and the US non-farm payrolls on Friday will also be in focus.

The latest ADP employment report was largely in line with expectations. In April, 204,000 jobs were added, with analysts anticipating 200,000, but the March figure was revised lower to 228,000 from 241,000. This paints the picture of a steady US jobs market.

Apple continues to be the apple of the market’s eye after the company posted better-than-expected earnings per share and revenue last night. The company upped its guidance, and announced a $100 billion share buyback scheme. The stock hit a two-week high and if the positive moves continues it could target $180.00.

Snap shares sank after the social media company warned that active users and revenue in the second-quarter would be lower. The company’s new design did not go down well with its users, and Snap is now paying the price, with the share price falling to its lowest level since its floatation.  

FX

GBP/USD snapped out of its recent losing streak after the UK revealed a dramatic turnaround in the construction sector. In April, the UK construction PMI report came in at 52.5, while economists were expecting a reading of 50.5. When you take into consideration the previous reading was 47, the bounce back is impressive.

EUR/USD hasn’t moved much today after the eurozone announced manufacturing data that was mixed. The German manufacturing sector remains strong, and the PMI report came in at 58.1, in line with expectations, and was essentially unchanged on the month. The rest of the region isn’t looking as strong, as Spanish and Italian reports showed a decline in the growth rate, and the reading missed estimates.

Commodities

Gold is a little firmer today after dropping to a two-month low yesterday. The metal is likely to experience low volatility today as traders will be waiting for the Fed update. The announcement from the US central bank could provide clues as to what monetary policy will be next month. The $100 mark is important for gold, and a break below it could pave the way for further losses.

WTI and Brent Crude are a touch lower after the US announced a large build in oil and gasoline stockpiles. The energy information administration (EIA) showed that US oil stockpiles jumped by 6.21 million barrels, while the consensus was for 1.15 million barrels. It was a similar story in gasoline, as stockpiles jumped by 1.17 million barrels, but traders were anticipating a decline of 738,000 barrels. The downward move in oil after the EIA numbers wasn’t huge, partially because the American petroleum institute yesterday also showed a larger-than-expected rise in stockpiles.

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