A mixed day for European equities ahead of FOMC meeting

Wednesday, March 19, 2014

European equity markets have had a mixed trading day, while the euro came under some pressure trading around the 1.39 area. The DAX and IBEX indices managed to close on positive territory, ending 0.37% and 0.42% higher, respectively, while the CAC index missed the trend after falling marginally by 0.12%.

In London, the equity benchmark index came under pressure and retreated by 0.49% following the announcement of UK budget for 2014 by Chancellor George Osborne. Highlights included extending the Help to Buy Scheme to 2020, while inheritance tax has been waived for emergency services staff. Chancellor Osborne is to tackle VCT and EIS abuse, while the welfare spending has been capped at £119 bln for 2015-2016 and the personal allowance is about to hit £10,500 in 2015. 

Financial stocks dragged the index lower, with the RBS, Standard Chartered, HSBC and Lloyds reporting losses between 0.82% and 1.31%.

Mining stocks also came under pressure as base metals prices fell slightly. 

In Ukraine, the situation remains tentative. The Russian Foreign minister said that Ukraine’s argument against legitimacy of Crimean referendum is “strange, illogical and legally ignorant”. 

The main focus will be switched to the US Fed meeting as Janet Yellen will report its first policy review as the new Federal Reserve Chairwoman. The US dollar has started to strengthen against the euro with the USD index eyeing the 79.5 area. 

GBP Daily Chart 

GBP Curncy (British Pound Spot )  2014-03-19 17-27-15

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