market relief

Stock markets are cautiously optimistic this morning as President Trump is confident a deal will be struck between the US and China in relation to trade. 

The weakness in global equities lately has largely been driven by the fear of a possible trade war, and now those fears have dwindled a little. Dealers have grown accustomed to the severe swings in stocks recently, and they are all too aware that rallies haven’t last long lately. 

Rolls Royce has approved the sale of L’Orange to Woodward for €700 million. The move will provide Rolls Royce with fresh capital, and it will continue its restructuring plan. Shares in Rolls Royce are up 1.9% today, and the stock has been broadly pushing higher since June 2016.

Shares in Deutsche Bank are up 4.1% after the company stated that Christian Sewing will replace John Cryan as CEO. Mr Cryan did a colossal amount of restructuring and avoided government assistance, but the share price remained under pressure as legacy issues persisted. The change of leadership has pushed up the share price, but Mr Sewing will have his work cut out.

GBP/USD ticked up after the stronger-than-expected UK house price data. According to Halifax, UK house prices increased by 2.7% for the three months until March, while economists were expecting a reading of 2.1%. While the pound remains above the 1.4000 mark, its outlook is likely to be positive.

EUR/USD nudged lower after Germany reported a 1.3% fall in imports, and a 3.2% decline in exports. The largest economy in the eurozone is a major net exporter, and traders were worried by the dip in exports.

We are expecting the Dow Jones to open up 219 points at 24,151 and we are calling the S&P 500 up 21 points at 2625.

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