Financial market research and analysis

It’s a short trading week with Friday with little to get excited about on the macro calendar today.
Last Friday, it was reported that US oil drilling rigs increased by 1 to 387 which took some of the momentum from the recent oil price surge. This has continued this morning with Brent Crude (May) down 1.41% and WTI (April) down 2.03%.

Some Asian markets have pulled back as oil prices retreat but there remains an element of hope that China will once again take a cleaver to interest rates. The Shanghai Composite has finally retaken the 3000 level as China Securities Finance Corp in its wisdom, loosened margin trading rules.  

For the most part, we can likely expect a quiet trading day while compared to the trading sessions of the past week or two but will ramp up tomorrow as we look towards Eurozone PMI and UK CPI. The softer tightening bias from the Fed last week has helped to underpin risk appetite and the FTSE has managed to take a peek at the 6200 level despite the softness in commodity producers.  The Dax has also pushed through the key 10,000 level, rising 1.4% with the biggest gains coming from the healthcare sector has Bayer AG rises 4.62% as talks with Monsanto continue.

A number of ECB policy makers making speeches this morning have done little to impact the single currency, it presently trades above $1.12 and at £0.7808 despite the recent dovish actions. Even Vitor Constancio is beginning to offer up excuses as to why recent monetary policies are failing to take hold.
The FTSE is up 0.3% with the mining sector providing the majority of the downward drag. Copper prices are muted around $2.27/lb and the market seems unwilling or unable to give it a boost that would allow it to run through the 200 DMA with any real conviction. Much of this has to do with this renewed dollar strength which is capping gains in commodities and thus creating the usual casualties in the basic resource space. All sectors, bar healthcare are trading in the red. 

Anglo American (-3.29%)

Glencore (-2.77%)

Antofagasta (-2.33%)

Shire plc (+2.19%) every broker and its mother seem to be upping price targets for this company. Significant revenue gains in Q4 nd the announcement of a dividend, (so rare these days) which will be paid on Tuesday, April 12th.  It’s the top riser this morning.

Rolls Royce (-1.19%) some profit taking underway following last week’s surge on news that the company is set to create 350 jobs at its historic engine factory in Derby.

Sainsbury (+1.31%) having avoided the need to up its offer for Home Retail confirmed its  offer for the group last Friday. Sainsbury’s are set to become Amazon’s biggest UK competitor with the acquisition of Argos.

Whitbread (+0.97%) is facing calls to consider a radical break-up of the company following disappointing trading and a slide in its share price. some shareholders believe the case for examining a separation of its Costa coffee stores from the Premier Inn budget hotel chain and Beefeater pubs, has been strengthened.

A small dip to 5.3m units is expected upon the release of the US existing homes sales but this may well represent a pullback in inventory levels rather than reduced demand.
We call the Dow Jones higher to 17632. The index seems to be on a mission to regain the losses from the beginning of the year and more. Being a bear at the moment is a lonely position.