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● Markets calmer after mid-week wobble as traders eye US healthcare vote
● S&P 500 futures inch up helping European stocks gain some ground
● More relaxed tone reduces demand for sovereign bonds, nudging up Bund yields
● Dollar index remains below 100 in subdued forex action
● Gold eases back after strong run while Brent crude holds above $50 a barrel

Markets are calmer after a wobble this week raised questions about the outlook for the “Trump trade” — the global rally that took place after Donald Trump won the US presidential election.

Concerns that Mr Trump might struggle in his efforts to replace “Obamacare” had investors fretting that he may also face difficulty pushing through his other pro-business agendas.

Wall Street recovered on Wednesday from its biggest one-day sell-off in more than five months, with the S&P 500 edging 0.1 per cent higher.

And futures indicate the US stock barometer will add less than 0.1 per cent to 2,350 when trading gets underway in New York as investors await the outcome of the House healthcare vote, which is scheduled to take place later on Thursday.

Analysts at RBC, the Canadian bank, said markets are viewing the healthcare vote as “a bellwether for the prospects for the Trump administration’s ability to get its tax reform proposals approved”.

What to watch
Sterling is barely changed at $1.2479 ahead of February’s UK retail sales data due at 09:30 GMT. Analysts expect growth of 0.4 per cent month-on-month, rebounding from a 0.3 per cent contraction in January, according to Reuters.

US weekly jobless claims are set for release at 12:30 GMT and US New Home Sales for February should be published at 14:00 GMT.

The calmer tone to US equity futures is helping deliver a steadier start in Europe, where the Stoxx 600 index is adding 0.03 per cent. London’s FTSE 100 is flat, supported by energy groups.

In Asia, Japan’s Topix was flat, unable to recover any of the previous session’s 2.1 per cent fall, while Australia’s S&P/ASX 200 advanced 0.4 per cent, following its 1.6 per cent retreat on Wednesday.

Hong Kong’s Hang Seng fell 0.1 per cent, but mainland China’s Shanghai Composite rose 0.1 per cent.

Fixed income
The calmer tone across markets is crimping demand for the perceived safety of government bonds, nudging yields higher as prices dip.

The German 10-year Bund yield is up 1 basis point to 0.41 per cent and the equivalent maturity US Treasury yield is adding 2bp to 2.41 per cent.

The more policy-sensitive US 2-year note is 1bp firmer at 1.26 per cent. The 2-year yield hit 1.40 per cent on March 15, its highest since June 2009, but has pulled back after the Federal Reserve’s comments that accompanied its rate rise last week were deemed less hawkish than expected.

Short term US bond yields have also fallen in response to lowered expectations about the Trump agenda.

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