BOJ Ends Negative Rates, Yen Slides

Equities

On Monday, the FTSE 100 and the FTSE 250 both closed slightly down by 0.1%, reflecting a cautious stance among investors ahead of a week filled with crucial economic data and a central bank policy announcement.

Marshalls, a supplier of landscaping and roofing products, saw its shares plummet by 8.5% after issuing a warning of lower revenue in 2024 due to a slower-than-expected recovery in the construction market. This came on the back of a reported decline in its annual profit, which contributed to a 1.4% slide in the broader construction and materials sector. In contrast, electronics retailer Currys saw its shares climb 6.0% after nudging up its profit outlook, buoyed by stronger-than-anticipated sales.

Across the pond, Wall Street's main indexes ended on a positive note, with the Dow Jones Industrial Average up by 0.20%, the S&P 500 by 0.63%, and the Nasdaq Composite by 0.82%. Alphabet and Tesla were among the mega cap growth stocks contributing to the gains, particularly buoying the Nasdaq. Alphabet enjoyed a significant boost following reports that Apple is in talks to integrate Google's Gemini AI engine into the iPhone, propelling the shares upward and leading to almost a 3% gain in the communication services sector. Tesla's shares surged by 6.3% after the company announced imminent price hikes for its Model Y EVs in parts of Europe.

Nvidia, another standout, added 0.7% to its share value as the company commenced its annual developer conference, with investors eagerly awaiting new chip announcements from CEO Jensen Huang. However, despite a positive start, Nvidia's shares closed below their session high.

Forex & Commodities

The Japanese yen saw some significant selling versus the dollar after a policy shift by the Bank of Japan from its long-standing negative interest rates. Speculation has been rife following larger-than-expected wage increases by major Japanese firms, which correctly hinted at an imminent end to ultra-loose monetary policies.

The euro and the British pound both experienced declines against the dollar, down 0.15% and 0.12% respectively, ahead of the Bank of England's meeting, where rates are expected to remain at 5.25%.

Gold prices dipped by 0.2% to $2,156.67 per ounce, influenced by the strengthening dollar and ahead of the Federal Reserve's policy meeting. This meeting is keenly awaited for any updates on economic and rate projections, which could impact gold's short-term performance.

Oil prices also fell slightly due to increased supply prospects from Russia and cautious trading in anticipation of the Federal Reserve's interest rate decision.