The Feds ray of sunshine

The FTSE found some renewed vigour Thursday, as did Wall Street last night, after the Fed surprised markets with a much softer tone on interest rate hikes for this year. In contrast to plans laid out only six weeks ago the central bank signaled that it may not raise rates any time soon while it monitors a slowdown not only in domestic economic growth but also a more widespread slowdown in the global economy. 

In the aftermath of the Fed’s announcement Treasuries firmed while the dollar plunged across the board. The currency is still not looking pretty this morning, losing ground against the pound, the yen and the euro. Apart from the Fed, Asian and European markets were also boosted by Chinese data indicating that the country’s manufacturing may not have slowed as much in December as it was initially feared.

Shell’s royal rally

Higher oil and gas prices in the fourth quarter of last year helped Royal Dutch Shell turn in a set of results that was better than expected. Earnings in the period to the end of December jumped up a dizzying 32% on the year, to $5.69 billion from $4.3 billion in 2017, particularly during the period when oil prices were whipped up into a frenzy ahead of the introduction of Iran sanctions. The downside of this set of results is that, with oil prices moving lower in the meantime, the energy giant will have to work harder to keep earnings up.

Trump to join China-US talks Thursday

The current set of China-US trade talks is now midway through and Thursday will see them moved onto a higher level with President Trump due to make an appearance. Painfully slow, the negotiations don’t seem to have brought the two sides much closer. Yet the negotiations will have to find more middle ground before 1 March if they want to avoid an escalation in the trade tit-for-tat that is likely to resume after the 90-day truce agreed between the two countries’ presidents runs out.