The New York Stock Exchange

As the FTSE 100 posted yet another all-time high, it appears the UK index is following in the footsteps of its US cousins.

Europe 

One notable difference between the FTSE and the US indices is the London market is making relatively small strides higher, which suggest a canned excitement.

GKN has added by far the most points on the FTSE 100 today after the company’s share price rocketed when it disclosed it rejected a takeover approach from Melrose. GKN felt the Melrose proposal undervalued the company, and this stock reached a record-high today.

The political mood is Germany is on the rise after Angela Merkel’s Christian Democratic Union (CDU) party reached an agreement with the Social Democrats, which will pave the way for negotiations to begin. This could bring about the possibility of a coalition being formed, and dealers are slightly more optimistic because of it.

The really in the euro has dented the DAX and CAC 40 earlier in the session but the indices have swung back to positive territory. The single currency has been assisted by the political situation in Germany, and yesterday's hawkish minutes from the European Central Bank are also playing into it.

Bovis Homes shares are up 1.6% after the company achieved its terms of completions, and the average selling price rose by 7%. Forward sales for next year are strong and the company is optimistic about future profitability.

US

US markets are still enjoying their bullish run as it is another round of record highs for the Dow Jones, S&P 500 and the NASDAQ 100, as mediocre economic indicators and positive earnings adds to the bullish sentiment.

The headline inflation rate in the US dropped back to 2.1% in December from 2.2% in November. The report came one day after the headline PPI rate fell to 2.6% from 3.1%. These figures will help erode some of the fear surrounding further interest-rate hikes from the US Federal Reserve.

JPMorgan and Wells Fargo both topped expectations on earnings per share (EPS), but fell short of the revenue estimates that analysts predicted. JPMorgan saw bond trading revenue fall by 27%, which has been a common theme on Wall Street in recent reporting seasons.

BlackRock is the best of the bunch as it exceeded EPS, revenue and total assets under management (AuM) forecasts. The asset manager also raised its dividend by 15%. The stock hit an all-time high today on the back of the figures.

FX

EUR/USD jumped to its highest level in three years as the improving political sentiment in Germany and the upbeat comments from the ECB yesterday are fuelling the rally. The political discussions in Germany may led to the formation of a coalition government, and though we are a long away off from that, dealers welcomed the news. Yesterday the ECB suggested their loose monetary policy may not last as long as investors suspected they would.

GBP/USD hit its highest level since the EU referendum as the US dollar continues to drive lower. As there have been no major economic announcements from the UK today, so this was down to weakness in the US dollar. The underwhelming PPI figures from the US yesterday and the cooling of the CPI figures today weighed on the greenback. The pound has been in an upward trend since March, and if it continues it could target 1.4000.

Commodities

Gold has hit a four-month high on the back of the weakness in the US dollar. The metal has been pushing higher for the past month, and the slight decline in US CPI was welcomed by gold bugs as it makes the Fed less likely to hike interest rates. Some dealers are pencilling in three rate hikes this year, but in light of the US data in the past two months, some are not so sure.  

Brent Crude oil and WTI are slightly lower today as traders locked in their profits. Yesterday, Brent Crude traded above $70 per barrel for the first time since November 2014, though it has now dipped below that level.

The commitment of traders report from the commodity futures trading commission (CFTC) showed that positions on Brent crude oil have reached a record high, potentially indicating that the market is over heated.


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