Stocks in Europe are higher this morning as the global mood starts to improve. 

There was a strong finish in New York last night and Asia overnight as traders focus more on corporate and economic data. While the Syrian conflict and uncertainty surrounding global trade are on hold, investors could remain bullish.

Hammerson have walked away from the proposed merger with Intu, and stated the weakness in the commercial property sector as a reason for calling off the deal. Last week Klepierre said they are no longer interested in acquiring Hammerson, and it appears that uncertainty about the retail sector is the common theme. Retail centres are experiencing declining footfall due to the rise in online shopping. Profit warnings are at seven-year highs, and this highlights the fragility of the retail sector. Mergers make sense if synergies exist, and if the wider sector is strong, but this isn’t the case in the UK commercial property industry. Shares in Hammerson are up 2.4%, while shares in Intu are down 4%.

Rio Tinto shares are higher this morning after the company issued a strong production update. Iron ore output rose by 5% on an annual basis. The miner has pledged to meet its target of shipping between 300 million and 340 million tons of iron ore this year. Copper production saw a 65% rise on a year-on-year basis, while coal production fell by 30%, with maintenance at the Kestrel mine partially blamed for the decline. The update shows that Rio Tinto is continuing to emerge from the downturn in the commodity sector that took place a few years ago. The solid growth figures from China yesterday also point to steady demand for metal in the foreseeable future.

GBP/USD sold off after UK CPI fell to 2.5% – its lowest reading since April 2017. The cooling of the cost of living has prompted traders to take their profits on the pound, and sterling lost ground yesterday, after posting seven consecutive rallies. The wider upward trend is still in place however, so the medium-term outlook remains intact.

EUR/USD was nudged lower by the eurozone inflation report, which showed the cost of living slipped and missed economists’ expectations. In March, the CPI rate fell to 1.3%, down from 1.4%, and the consensus was for it to remain steady.

In US corporate news, Morgan Stanley release first-quarter results later today.

We are expecting the Dow Jones to open up 14 points at 24,800 and we are calling the S&P 500 up 7 points at 2713.

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