Major equity benchmarks like the FTSE 100, DAX and CAC 40 have reached five month highs as traders are in risk-on mode. 

Europe

There hasn’t been any major macroeconomic or geopolitical news, dealers are looking ahead to the Fed’s two-day meeting, which starts today. The consensus estimate is that the Fed will keep rates on hold, and some traders feel the language the Fed will use will be neutral, and that has raised investor confidence today.

Ocado confirmed the fire at the Andover fulfilment centre hit revenue, but the impact wasn’t that bad. The online grocer said the incident was equivalent to 1.2% of revenue in the first-quarter. For the three month period, retail revenue increased by 11.2%. Average order size dipped by 0.2% and average orders per week jumped by 11.3%. Ocado claimed the fire was only a temporary setback, and the numbers would suggest that too. The group plans to build a state-of-the-art replacement facility. The stock has reached a new record high today, and if the bullish move continues it might target 1,300p.

ASOS said the US operation held the group back. Total retail sales for the second-quarter increased by 11%, but the US division registered a 3% drop, while the UK business saw a 14% rise. ASOS confirmed the US unit’s performance was behind their plans, and that did the damage to investor confidence. On the bright side, the full-year sales growth and gross margin forecasts were left unchanged. The stock saw a lot of volatility today, and while it holds below the 3,350p region, its outlook is likely to be negative.

Ferrexpo shares are in the red after the company decided to delay releasing its full-year results after it said it discovered additional discrepancies in the donations that were made to the charity Blooming Land. An independent review into the charity donations are ongoing, and they are being carried out in the UK and Ukraine. The group plans to publish its full-year results on or before 3 April.

US

Sentiment on Wall Street is positive too as traders are anticipating the Fed to announce a middle of the road statement tomorrow. The US central bank is tipped to keep rates on hold tomorrow, and some dealers are not anticipating any hawkish language, and that is lifting investor confidence.

Fedex shares are in demand today and the company is due to release its third-quarter results after the market close. Retail has been mixed industry lately, the high street has been suffering, but online sales have been strong, and that is where Fedex will come into play. The delivery service will be a good barometer for how well the e-commerce trade is performing.

Factory orders grew by 0.1% in January which undershot the 0.3% forecast, and keep in mind the December report also showed 0.1% growth.

FX

The US dollar is a little lower as the Fed begin their two day meeting today. The US central bank are expected to keep interest rates hold tomorrow, and some investors also anticipating the central bank to issue a neutral statement.

GBP/USD is a little higher on the back of the solid economic indicators from the UK, and there is optimism that Brexit will be postponed. The UK unemployment level dropped to its lowest level since the 1970’s. There is a growing belief that Article 50 will be extended, and that is helping the pound too.

EUR/USD has been given a small lift on the back of the slip in the greenback. The German ZEW economic sentiment repot came in a -3.6, which was an improvement on the -13.4 reading in February. It is worth noting, the reading has been in negative territory for 12 consecutive months.   

Commodities

Gold is a touch higher today due to the slip in the US dollar. The metal and the greenback continue to have a strong inverse relationship. Gold has been in a strong upward trend for four months and if it holds above the $1,290 region, the bullish move is likely to continue.

Oil reached a four month high today before retreating. It is believed that OPEC and its allies like Russia, are going to continue with further production cuts. The US imposed sanctions on Iran and Venezuela have added to the concerns about supply too. 

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