US Fed send waves of positivity through the markets

The markets awoke with a spring in their step this morning following a sign of hope from the US Federal Reserve.

Last night the US Fed spoke of its confidence in a US economic recovery, and its faith in the country’s ability to ignore the international unrest that is looming over many of the other markets. Unsurprisingly, this bullish sentiment was felt by the US markets, as the Dow slowly began to lurch into gear and try and climb back up to 18000. The dollar similarly was buoyed by this news, eating further into the euro and the pound as the morning went on. This afternoon will see US unemployment claims, a final test before the big one tomorrow: non-farm employment change figures, and the potential volatility that figure carries with it.

As Japan continues its sleepy start to 2015, the Nikkei is currently at piggybacking on the trends of the US markets. Luckily for the Japanese index, with the US Fed’s confident statement last night, the Nikkei could post a near-200 point gain today as it rode the wave of bullish sentiment that swept through the markets.

After a turbulent start to the week, including Greek-inspired woes and a slide into deflation, the Eurozone is remarkably strong all things considered. The increased chance of ECB QE is prompting the region to maintain the gains it made yesterday; similarly, the euro is continuing its fall off the back of the very same hope as the currency readies itself for a big hit if the stimulus package goes ahead. With region-wide retail sales to be announced later this morning, the Eurozone will be hoping it can maintain its movement into the green in its run up to what will be a volatile time in the next few weeks.

The FTSE continued its rebound this morning, despite a slightly mixed set of housing price data. Whilst the Halifax HPI came in higher than expected the UK is still in the midst of 11-month low in house price inflation. However, the UK index managed to ride out this disappointing news and keep in line with the positive sentiment that the markets are awash with this Thursday. All eyes will now be on comments from the Bank of England later today to see if the FTSE can keep a hold of its renewed vigour.

The FTSE also managed to survive a disappointing set of retail data from key companies like Tesco and Marks & Spencer; the former has just announced an aggressive cost cutting plan much like ASDA yesterday, a plan that includes the closure of 43 UK Stores, whilst the latter saw big losses for its perpetually disappointing clothing division.

Finally, oil managed to recover from a potentially disastrous day yesterday, seeing Brent Crude rebound to around $51 per barrel. Oil is currently a serving a lesson in relativity; a stable price of $51 per barrel is now seen as a positive from markets that were decrying a potential fall to $70 per barrel mere months ago. However, it looks like the markets will have to keep shifting what a relatively positively price for oil looks like as the commodity remains constantly on the precipice of yet another decline.