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● Global bourses mixed as S&P 500 futures ease from highs
● Dollar index softer and Treasury yields slip
● Sterling approaches $1.30 ahead of Bank of England inflation report
● Brent gains ground as traders await US inventory data

Futures show the S&P 500 slipping 3 points to 2,394, so investors may have to wait another day to see the S&P 500 close above 2,400 for the first time.

Wall Street’s equity barometer has popped above that level — yet another milestone in the 8-year bull market — during the first two session’s of the week, but has then inched down from highs as the rally shows signs of losing momentum.

The first quarter US corporate earnings season that has helped power recent stock gains is drawing to a close, leaving some investors looking for a fresh catalyst that can propel the market out of another consolidation phase.

The CBOE Vix index, a measure of expected S&P 500 volatility closed on Tuesday at 9.96, holding near its lowest level in more than two decades and suggesting traders are relaxed about the markets short term prospects.

Meanwhile, earnings have been generally well received in Europe, too. The Euro Stoxx 600 index, which has also received a boost of late by a waning political concerns, is up 9.5 per cent for the year to trade near its best levels since August 2015.

“Another set of reassuring company results [has] supported the better mood and…data suggests Q1 earnings for the Euro Stoxx index are currently running some +20 per cent year-on-year ahead,” said Ian Williams, strategist at Peel Hunt.

However, in keeping with the dip in US futures on Wednesday, the Stoxx is easing just 0.1 per cent.

Action in Asia on Wednesday was more mixed. Hong Kong’s Hang Seng rose 0.7 per cent and traded above 25,000 points for the first time since July 2015. But mainland China’s Shanghai Composite fell 0.8 per cent as investors continued to be concerned by Beijing looking to damp down speculation in financial markets.

Japan’s Topix was up 0.2 per cent and Australia’s S&P/ASX 200 added 0.6 per cent as the four major lenders — Commonwealth Bank, Westpac, National Australia Bank and
ANZ Banking Group — fought off early declines that were triggered after the treasury on Tuesday announced a levy on bank liabilities that would cost the lenders about A$6.2bn over the next four years.

What to watch
Oil market traders will be keeping an eye out for the latest weekly US energy inventory report, due for publication at 15:30 BST. Concerns that increasing supply from US producers are counteracting output cuts agreed by Opec pushed oil prices sharply lower last week.

Brent crude, the international benchmark which fell to an intraday five-month low of $46.64 a barrel on Friday, is up 0.5 per cent to $48.97 in the current session. West Texas Intermediate, the main US contract, is adding 0.6 per cent to $46.14 a barrel.

Copyright The Financial Times Limited 2018. All rights reserved.

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