European shares pull back from 21-month highs, despite strong earnings, while the dollar falls on concerns over U.S. President Donald Trump's dismissal of his FBI chief. David Pollard reports.
The ups and downs of the markets - nothing perhaps as compared to the ins and outs of power. South Korea's new president spent his first day in office. Whilst Washington was in need of a new FBI director - after the summary sacking of James Comey. Donald Trump's shock move sending the dollar down 0.6 per cent against the yen - initially. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "Markets really are concerned about the Trump administration's ability to pass through tax reform and regulatory repeal. Does the sacking of the head of the FBI change that dynamic? I don't think anybody in the markets thinks it has." That reaction accounting for a sudden rebound in the greenback's fortunes. The dollar climbing close to an 8-week high against the yen, as risk appetite returned. The weaker yen also pushed Japan's Nikkei to a 17-month high. Though President Moon's victory in South Korea triggered profit-taking there. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "A lot of the advantages of having a new leader in South Korea was already in the price in South Korean equities. We saw a big rally ahead of the election result." Europe's share markets appeared in need of a breather after their recent 21-month highs. Amid a slew of upbeat earnings, some results disappointed, though financials continue to surprise. ING shares up 2.7 per cent on its Q1 numbers, AXA more than two per cent on plans to float its US business. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "Investors will take, and have taken, some support from that and looking forward to the rest of the year and whether banks have turned a corner." Markets appear ready to take on risk as global ones recede. The VIX volatility index fell to its lowest level in over 10 years on Tuesday. The traditional safe haven of the Swiss franc has been at its lowest level in seven months.