Market Commentary

FX Comment

The US Dollar rose against most of its major counterparts on Tuesday. There was no major economic data reported in the US. The Euro declined against most of its major counterparts. In Europe, euro zone PMI composite index for March was 54 in final estimation from 54.1 in first reading and 53.3 the month before. PPI index was up 0.5% in February after a 1.1% drop in January. Consensus was +0.1%. UK PMI services index increased to 58.9 in March from 56.7 in February. It was anticipated to be 57. The Australian Dollar gained against all of its major counterparts.

Market Comment

US indices fell on Tuesday pressured by shares in the Real Estate, Automobiles & Components and Utilities sectors. The S&P 500 (2076.33) remains above its 20d moving average (2073.4 - negative slope) and its 50d moving average (2074.2 - flat slope). European markets are expected to start on a negative note.

Commodities Comment

After the close of Wall Street, WTI Crude Future (MAY 15) was up $1.6 to $53.77. The contract was above its 20D MA (@ $48.61) and above its 50D MA (@ $50.49). Gold was down $4.2 to $1210.7. The precious metal was above its 20D MA (@ $1184) and above its 50D MA (@ $1207). Copper Future (MAY 15) on Comex was up 3.7c to 275.35c/lb. The contract was above its 20D MA (@ 271.41c) and above its 50D MA (@ 264.04c). In Europe, the London Metal Exchange reported its copper inventories decreased 125 tons to 333300 tons.

UK Market News

BG Group and Royal Dutch Shell announced that they have agreed on the terms of a recommended cash and share offer to be made by Shell for BG, saying: "BG Shareholders will be entitled to receive: For each BG Share: 383p in cash; and 0.4454 Shell B Shares (...) The Combination will result in BG Shareholders owning approximately 19% of the Combined Group. (...) The Boards of Shell and BG have agreed that BG Shareholders will continue to be entitled to receive their final dividend for 2014 of 14.37 cents (9.52p) per BG Share which has already been announced by BG, as well as an interim dividend in respect of the six month period up to 30 June 2015 of not more than the interim dividend in respect of the six month period up to 30 June 2014 of 14.38 cents per BG Share. (...) BG Shareholders will benefit from access to Shell's dividend policy in respect of each dividend for which the record date falls after completion of the Combination. Shell confirms its intention to pay dividends of $1.88 per ordinary share in 2015 and at least that amount in 2016. (...) BG Shareholders will be entitled to elect to receive the share component of the Consideration in the form of Shell A Shares, as opposed to Shell B Shares, at the same exchange ratio. (...) Shell is confident that, as a direct result of the Combination, the Combined Group could generate attractive synergies and create additional shareholder value. Shell has identified pre-tax synergies that are expected to reach $2.5B per annum in 2018, comprising $1B of operating cost savings and a $1.5B reduction in exploration expenditure." Easyjet reported March passenger traffic up 7.5% YoY to 5.49M earned seats flown with the load factor gaining 1.1 percentage points to 92.6%. Atkins (WS) Plc issued a pre-close trading update: "The Group has continued to trade well through the fourth quarter, with very good cash flow generation, and we expect to report underlying results for the year ended 31 March 2015 in line with expectations." Oil & Gas basic resources and utilities shares gained most in London on Tuesday. Financial Services: Henderson Group (+2.8% to 290.4p) and International Personal Finance (+1.92% to 500p) reached a new 3-month relative high against the FTSE 100. Media: Daily Mail & General (+2.48% to 909.5p) closed at a 3-month relative high against the FTSE 100. Stock/Benchmark ratio(s) 50D MA cross over: Victrex Plc (+3.75% to 1992p). Stock(s) 50D MA cross over: Antofagasta (+3.13% to 740.5p), BG Group (+6.74% to 910.4p), Glencore (+3.53% to 290.65p), Intercontinental Hotels (+2.17% to 2683p), National Grid (+1.87% to 893.3p), Ophir Energy (+6.9% to 145.6p), Segro Plc (+1.69% to 426.6p), Shire (+4.36% to 5385p), Telecity Group (+1.73% to 914p), United Business Media (+3.53% to 556.5p), United Utilities (+2.56% to 962p), Victrex Plc (+3.75% to 1992p).

German Market News

Volkswagen seeks to expand its assembly plant in Chattanooga in the US state of Tennessee, reported Dow Jones citing a plant sopkesman. Wirecard said FY14 net income rose to E108M from E83M and proposed raising dividend to E0.13 per share from E0.12. Chemicals: BASF (+2.62% to E95.07) and Evonik Industries (+2.12% to E34.75) reached a new 3-month relative high against the Dax. Health Care: Merck KGaA (+2.27% to E108.05) reached a new 3-month relative high against the Dax. DE - Stock(s) 50D MA cross over: E.ON (+3.89% to E14.28), Fuchs Petrolub (+2.72% to E38.91), RWE (+4.02% to E25).

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