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Reports UK

UK stock market commentary (April 04, 2014)

April 4, 2014, Friday, 05:17 GMT | 01:17 EST | 09:47 IST | 12:17 SGT
Contributed by Capital Spreads

European equities are set to creep higher as traders expect a solid Non Farm Payrolls figure. Follow last months upside surprise, many think the bad weather effect to have finally thawed and the data to have gotten back to trend. Only a short while ago traders and markets were stuck in the quandary of whether good news was actually good if led to the Fed exiting it’s stimulus program and speeding up the monetary policy normalisation process. Despite Yellen’s hick up at her first press conference, her comments about “considerable slack” in the economy earlier this week have given the bulls the green light to rally on good news.

Ahead of the nonfarm payrolls report, investors discarded the negative economic data to push the Dow Jones 26 points higher to 16,591. The unemployment claims rose more than forecast last week signalling a struggling jobbing sector and the trade balance deficit was also bigger than estimates. However, a gain of over 200,000 jobs today and the rally could still go on.

The ECB kept its benchmark interest rate unchanged at its monthly meeting. Nonetheless President Mario Draghi reaffirmed his pledge the central bank stands ready to take the necessary measures to fight the risk of deflation. That statement sent the shared currency sliding versus the US dollar, 46 pips to 1.3720.

It appears that hopes of restoring oil exports in Libya might be harder to materialise as tensions between government and the rebels still existed. So the energy complex undid the previous sessions’ slump in oil prices. Thus, the WTI crude prices rebounded into the triple digits area gaining $1.11 to $100.43 despite a stronger greenback.

It was the plunging demand for hedging that refuses to go away for gold investors. The precious metal headed south again losing $3.8 to $1286.6 even on weaker US economic data. That has to mean out of favour investment.